Eric Schmidt, Co-Founder, Schmidt Futures, speaks throughout the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California.
Patrick T. Fallon | AFP | Getty Images
Sen. Elizabeth Warren on Tuesday pressed Defense Secretary Lloyd Austin about his company’s enforcement of conflict-of-interest guidelines for federal advisory boards, zeroing in on former Google CEO Eric Schmidt after CNBC reported on his previous involvement on influential panels in an trade the place he was an investor.
“Federal advisory boards can provide valuable advice and insights to federal agencies, but without strong oversight and clear guardrails they can also provide their board members an unfair competitive advantage in winning government contracts and influencing agency policy,” Warren wrote in a letter to the DOD head.
Warren mentioned she was involved about experiences alleging Schmidt leveraged his positions on two federal advisory committees “to further his own personal financial interests.” Those experiences might counsel the Defense Department didn’t adequately apply federal battle of curiosity guidelines “and therefore failed to protect the public interest” in Schmidt’s case, wrote the Massachusetts Democrat.
Warren, who sits on the Senate Armed Services Committee and leads congressional subcommittees on financial coverage and monetary accountability, requested Austin to element the Pentagon’s conflict-of-interest coverage for advisory board members and reply a number of questions on Schmidt’s service on the panels.
Schmidt made greater than 50 direct private or oblique company investments in AI firms whereas he was serving because the chairman of the National Security Commission on Artificial Intelligence, or NSCAI, she mentioned, citing a CNBC article from October. The group, established in 2018, suggested the Pentagon and White House on AI coverage — even crafting legislative language that later handed phrase for phrase — and helped steer billions of {dollars} in spending towards the AI trade. The group wound down in 2021.
Walter Shaub, a senior ethics fellow on the Project on Government Oversight, informed CNBC on the time that Schmidt’s investments “absolutely” posed a battle of curiosity. There was no indication that Schmidt broke any ethics guidelines or did something illegal whereas chairing the fee.
“Dr. Schmidt has complied with all of his obligations, including any required disclosure of assets and investments, as required by Congress in FACA and OGE in the Form 450” in each of his federal advisory roles, Schmidt spokeswoman Tara Rigler informed CNBC in a press release.
She famous that Schmidt and NSCAI solely had the authority to make suggestions, not legislative or executive-branch adjustments. “There was no effort to unduly influence,” she mentioned.
“The nature of Federal advisory committees is to seek the input of experts that know the issues. If one disqualified individuals in the private sector from helping the government, almost no one of substance would be eligible,” she added.
Warren’s letter referenced Schmidt’s work on the NSCAI and the Defense Innovation Board, or DIB. Both advisory boards are topic to conflict-of-interest guidelines underneath the Federal Advisory Committee Act.
“These boards can exert significant influence in shaping government research and procurement priorities, making it essential that agencies prevent and mitigate conflicts of interest,” the senator wrote. “I am concerned by press reports indicating the Department may not have adequately followed FACA conflict of interest rules and therefore failed to protect the public interest.”
The NSCAI underneath Schmidt advocated for a significant enhance in authorities spending on AI. “But Mr. Schmidt has a clear conflict of interest in this issue: the NSCAI recommendations could direct funds to Mr. Schmidt and his business partners, who have invested more than $2 billion in companies focused on artificial intelligence,” Warren wrote, citing reporting from Protocol.
“Mr. Schmidt’s investment activities, and the lack of public disclosure, create the appearance that these boards are yet another tool for influence-peddling and profiteering at DoD, raising concerns about the ethics of their members and the utility of their recommendations,” Warren wrote.