Watchdog group: Biden's top digital officer has financial investments that 'do real harm to the American people'

• The Project on Government Oversight is flagging the financial ties of Mina Hsiang.
• Hsiang is in charge of the Biden administration's digital work across the federal government.

A nonpartisan government watchdog group is sounding an alarm about tech investments held by the Biden administration's top digital officer.

The Project on Government Oversight has filed a complaint raising conflict-of-interest questions about Mina Hsiang, administrator of the US Digital Services.

The letter draws attention to several stock holdings including Hsiang's investment in Rebellion Defense, an artificial intelligence defense company that received a government contract in July 2021. Hsiang joined the administration first as an advisor in January 2021, when the holdings were worth between $15,000 and $50,000.

When she sold the stock on September 30, 2021 — weeks after being tapped to the role of administrator — it was worth between $500,000 and $1 million, her financial disclosures show. Hsiang filed both disclosures past a federal deadline, but within a 30-day grace period where she wouldn't face a late penalty.

The Biden administration granted Hsiang an ethics waiver that allowed her to keep most of her investments. Generally, most officials must divest the shares within three months of joining government from the private sector so that they can avoid having conflicts of interests arise.

Hsiang's role involves overseeing 200 government workers and falls under the White House's Office of Management and Budget, where POGO directed its complaint.

"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," Walter Shaub, who leads POGO's Government Ethics Initiative, wrote in the letter.

Shaub, who was director of the Office of Government Ethics under the Obama administration and was critical of ethics rules under the Trump administration, told Insider in an interview that POGO was alarmed by the waiver because of its "sheer size."

"It's just unheard of to issue basically an everything waiver for almost all of a person's assets," he said. "That literally puts them above the law."

POGO's complaint comes at a time when Congress is considering whether to ban members of Congress — as well as their family members, top congressional staffers, and even judges and Federal Reserve members — from trading individual stocks. The issue came to a head after Insider's "Conflicted Congress" report found 57 members of Congress and at least 182 senior-level congressional staffers had violated federal conflict of interest laws by failing to properly report their stock trades.

OMB did not respond to Insider's questions about whether it intended to respond to POGO's letter, nor explain the various investments in Hsiang's portfolio.

Parts of the waiver explain that the agency she oversees doesn't decide which tech companies to award contracts to.

"Consistent with the stringent ethics standards this administration has put in place, these waivers were granted in full compliance with the law and through the standard process, following consultation with the Office of Government Ethics," said Isabel Aldunate, an OMB spokesperson. "Moreover, the waivers include important limitations to ensure that they do not extend more broadly than appropriate."

Shaub said that while the White House's arrangement with Hsiang might be legal, "it isn't necessarily right."

"A president could literally issue a waiver covering every asset owned by every government employee, and it would be legal, but nobody could argue it was the right thing to do," he said.

Hsiang's transactions in Rebellion Defense create at least an optics problem that "scream for an independent investigation," according to POGO's letter. Hsiang sold her shares after Rebellion Defense raised $150 million in venture capital funds, so it's possible that she sold off her shares because a new investor came in.

Shaub said it was important to find out whether OMB let Hsiang hang onto her shares until they were worth more, whether Rebellion paid her a higher dollar amount for her shares because of her government role, and whether the company received its defense contract because of its ties to Hsiang.

"We are willing to keep an open mind that maybe she has a legitimate answer, but without any explanation the public is left to imagine the worst," Shaub said.

POGO also took issue with Hsiang's $950,000 investment in hedge fund MFN Partners given that it actively trades and could include companies the federal government does business with. Hsiang's waiver says she isn't able to divest from the firm until the end of 2024 because of the fund's withdrawal policy.

POGO's letter urges OMB to either rescind the waivers so Hsiang has to divest her holdings, or to reassign her to an advisory role. The Senate has not yet conducted a confirmation vote for Shalanda Young, who is acting director and whose nomination to OMB director has otherwise cleared key Senate panels.

Hsiang held several digital roles under the Obama administration, including as part of the team that oversaw the Healthcare.gov site that allowed people to buy government-subsidized private health insurance. After she left the Obama administration she was an executive at Devoted Health, a privatized Medicare company that connects patients to doctors.

Since joining the administration she has overseen the Vaccines.gov website which allowed people to search for places where they could get inoculated against COVID-19.