The Cold War ended 30 years ago, but you’d be hard-pressed to know that watching Saule Omarova’s confirmation hearing Thursday. One after another, Republicans on the Senate Banking Committee hinted darkly at the idea that Omarova — who was born in the Soviet Union — is a not-so-secret communist devoted to destroying American capitalism.
The truth is that Omarova, President Joe Biden’s nominee to be comptroller of the currency, has no interest in reviving the USSR. And what’s truly ridiculous about the attacks on her is that in another era, Omarova’s biography not only wouldn’t have been a hindrance — it likely would have been seen as an asset by anti-communist Republicans.
If confirmed, Omarova would be the top regulator of the biggest banks in the country and their combined $14.9 trillion in assets.
The gig she’s up for combines a low profile with high stakes. The Office of the Comptroller of the Currency, which sits independently inside the Treasury Department, “charters, regulates, and supervises all national banks and federal savings associations as well as federal branches and agencies of foreign banks.” If she is confirmed, Omarova would be the top regulator of the biggest banks in the country and their combined $14.9 trillion in assets.
That oversight capability is why Republicans and the banking lobby have spent the last two months trashing Omarova. Sen. Pat Toomey, R-Pa., opened the salvo last month in a floor speech that claimed she’s a “more radical choice for any regulatory spot in our federal government” than any he’d ever seen.
Toomey, as the ranking member of the Banking Committee, also sent Omarova a letter demanding “a copy of the original Russian-language thesis” from her undergraduate studies at Moscow State University. (She doesn’t have it, she recently told New York Magazine.) Sen. John Thune, R-S.D., also made sure to emphasize her past as a “Lenin scholarship recipient” when talking to Fox News in late October. Sen. Ted Cruz, R-Texas, on Sunday labeled her “a radical” who “literally trained in the Soviet Union.”
Things only got worse during Thursday’s hearing. Sen. John Kennedy, R-La., pressed Omarova about whether she was a member of a group called The Young Communists. Yes, she answered — because every schoolchild was made to join. “Have you resigned from that group?” Kennedy followed up. Omarova explained that it’s something you age out of, not something you’d send a letter to resign from — but Kennedy asked her to search her records for a letter anyway.
While Kennedy and others insinuate that she’s the reincarnation of Vladimir Lenin himself, Omarova’s life story is one that would have made for ideal anti-Soviet propaganda. “My grandmother was orphaned because Stalin sent her entire family to Siberia and they died there,” she told The Financial Times. “Her family was destroyed because they were educated Kazakhs who didn’t join the party.”
And that paper that Toomey requested? “I was in the Soviet Union, where there was no academic freedom, and this was a mandatory assigned topic,” she explained. “What I wrote in that paper has nothing to do with what I believed in then or in what I believe in now.” Indeed, rather than being indoctrinated in Marxist-Leninist thought while at college, Omarova added, she instead became radicalized against totalitarianism:
“I was really lucky to get to Moscow State University. ... I was 18, and within a year I became an anti-communist like most of my classmates. We were reading stuff that was prohibited. We were listening to Pink Floyd, which was illegal, we were talking about Solzhenitsyn,” the author and Soviet dissident.
When she began her Ph.D. program, she chose to study American democratic theory. And when the Soviet Union collapsed while she was on exchange at the University of Wisconsin, she opted to stay in the U.S., she told MSNBC’s Chris Hayes last year.
“She really impressed us, taking a full load of graduate courses. She came first of all to study democratic political theory, so the idea that she’s a Leninist is absurd,” Omarova’s dissertation director at Wisconsin told New York Magazine as part of its excellent profile of her.
Omarova went on to study law at Northwestern University before working in the financial sector and President George W. Bush’s Treasury Department. From there, she became an academic writing about the banking industry in the aftermath of the 2008 financial crisis, centering her research on how to improve banking laws and prevent another collapse.
Omarova sounds like a dream cobbled together in a Reaganite fantasy: Descended from dissidents, she admired America from afar, and rather than embrace communism, she chose to fight to improve the stability of the U.S.’s capitalist systems. What’s not to love for a red-hating Republican?
Well, it turns out a lot — if you’re indebted to the big banks. Instead of accepting her rejection of Soviet thinking, opponents are using her past to dismiss and demonize her research. That especially includes a paper Omarova wrote last year and had published in the Vanderbilt Law Review last month.
Omarova sounds like a dream cobbled together in a Reaganite fantasy.
“The People’s Ledger: How to Democratize Money and Finance the Economy” is a 71-page academic study on how to separate big banks’ lending features from their role as safekeepers of Americans’ savings through setting up universal bank accounts at the Federal Reserve to replace private bank deposits. It’s a bold plan, one that is “deliberately ambitious in scope and substance” and “defines the frontier of reform possibilities.” Which, as she told the senators Thursday, was her job as an academic — to come up with the biggest-swing policy ideas and leave them to Congress to enact or reject.
Rather than engage with the ideas in the paper — which she’d have no power to enact as comptroller — the right has instead chosen to focus on a single line plucked out of context: “By separating their lending function from their monetary function, the proposed reform will effectively ‘end banking,’ as we know it.” That phrase is a play on another author’s book title, which Omarova makes clear in the footnote. But it doesn’t matter. Her Republican opponents have the talking point they want.
Omarova can expect zero GOP support for her nomination moving out of committee, and she wouldn’t have gotten any even if she hadn’t been born in the Soviet Union. I even have some respect for Sen. Thom Tillis, R-N.C., who said he opposes her policies but not her origin story: “I don’t have any concern with where she came from: You can’t pick where you were born, and you picked the greatest nation on Earth to become a citizen.”
The biggest question is whether she can count on the support of moderate Democrats Jon Tester of Montana and Joe Manchin of West Virginia, who’ve been noncommittal. My hope is that they end up greenlighting her for the role. Someone needs to be able to both rein in the lawless frontier that is the cryptocurrency market and prevent the major banks from preying on their depositors. Omarova, who chose capitalism over communism and the American public over the big banks, seems primed to do both.
