House subcommittee hears dueling claims over EBSA’s investigative practices, secret information sharing and funding shortfalls

At a House Education and Labor Subcommittee hearing, lawmakers and witnesses clashed over allegations that the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) secretly shared investigative materials with private plaintiffs’ attorneys and over competing proposals to require more transparency — even as witnesses warned that recent budget cuts and staff losses have already slowed EBSA investigations.

The dispute matters to millions of Americans: witnesses and members repeatedly noted that more than 800,000 private, ERISA-covered retirement plans collectively hold roughly $9 trillion in assets and cover more than 70 million workers and their families, and that delays or flawed enforcement can affect benefits and health coverage nationwide.

Attorney Lars Golombek, principal at Groom Law Group, told the subcommittee that documents produced in litigation show the department provided confidential findings and coordinated with class‑action lawyers, a practice a federal magistrate described as enabling litigation “in the shadows.” Golombek said his firm discovered an unredacted findings letter showing the Department of Labor had supplied information to a plaintiffs’ firm “pursuant to a common interest agreement,” and that the arrangement had given plaintiffs “access to information they can leverage” in ways that can short‑circuit normal discovery and defenses.

Representing plan sponsors, witnesses described long, open investigations and an uneven process. Jim Bonham, president and CEO of the ESOP Association, said EBSA’s investigatory approach has a “chilling effect” on plan formation and described multiyear, stop‑start probes that often lead plan sponsors to pay settlements or insurance amounts simply to end litigation. Bonham also cited the Bowers case as an example where a prolonged EBSA investigation and litigation produced no findings but produced substantial legal costs for plan sponsors.

By contrast, witnesses with ties to EBSA or who had formerly worked there defended the agency’s overall enforcement record and urged Congress to address resources rather than add burdensome reporting. Ali Khawar, who testified in a personal capacity after nearly 20 years at EBSA, said the agency recovered roughly $1.4 billion to $1.5 billion in the most recent fiscal year and stressed that “EBSA’s enforcement matters.” Khawar and other witnesses, including Andy Banducci of the ERISA Industry Committee, said documented examples of common interest agreements are rare: Banducci and Khawar both noted that over a 15‑year span EBSA recorded only a dozen common‑interest agreements out of roughly 31,000 investigations, a figure they presented to question whether the practice is widespread.

Several witnesses supported narrower transparency steps. Banducci said ERIC supports the EBSA Investigations Transparency Act, which would add modest annual reporting requirements about investigations, and other measures to disclose the scope of any cooperation between EBSA and outside counsel. Members of the majority touted the Balance the Scales Act and the EBSA Investigations Transparency Act, which would require written agreements before EBSA shares certain investigatory materials with private attorneys and would notify plan sponsors in some cases.

Others on the panel and many Democrats warned that the bills could hinder consumers. Representative Susan McBath (D‑GA) and others said added procedural requirements could prevent EBSA benefit advisers from quickly helping individuals with urgent health‑care denials, describing examples in which EBSA interventions reversed denials of life‑saving treatments. Multiple witnesses warned that newly proposed reporting and pre‑sharing requirements could create additional paperwork that would slow informal problem‑solving and direct assistance.

Several witnesses and members urged Congress to await the Department of Labor Office of Inspector General (OIG) review into EBSA’s information‑sharing practices. The OIG is investigating whether EBSA’s agreements and other contacts with private firms were appropriate. Committee leaders left the record open for 14 days for members to submit additional written materials and thanked the four witnesses: Lars Golombek (Groom Law Group), Andy Banducci (ERISA Industry Committee), Ali Khawar (former EBSA official, appearing in a personal capacity), and Jim Bonham (The ESOP Association).

No formal votes or agency rule changes were taken at the hearing. Lawmakers and witnesses framed the next steps as oversight and potential legislation, with the inspector general’s pending review repeatedly cited as the fact‑finding vehicle that committee members should await before making broad statutory changes.

For the public, the hearing underscored two parallel disputes: whether EBSA engaged in improper, secret information sharing with plaintiffs’ counsel that undermined defendants’ ability to defend themselves, and whether Congress should prioritize restoring EBSA staffing and funding so the agency can perform timely enforcement and benefit‑recovery work.