Biden Nominee Saule Omarova Speaks Out About The Campaign To Smear Her As ‘Soviet’

Omarova says Wall Street backed the successful campaign to brand her a communist.
Saule Omarova
TPM Illustrations/Getty Images

Saule Omarova left her confirmation hearing feeling calm.

She didn’t think she’d been “savaged,” as some writers would later put it. She’d held her own on what had become a rhetorical battlefield, remaining calm under fire from hostile senators peering down at her.

Sen. John Kennedy (R-LA) had earned gasps — and reams of coverage — after demanding to know whether Omarova, who emigrated from the Soviet Union in 1991, had resigned from the Komsomol, a Soviet youth organization.

“I don’t know whether to call you professor or comrade,” he intoned.

Omarova, a professor at Cornell Law School, did sense that the conversation had strayed very far away from her focus as an academic and the point of her nomination to lead the Office of Comptroller of the Currency: regulating the big Wall Street banks. But she didn’t believe her detractors would be successful.

“The conversation was about the fact that I was communist,” she says. “Some bizarre nonsense, that implied she’s a sleeper agent — for whom? For Brezhnev? I don’t even know.”

Yet ultimately, the smear campaign worked. In the wake of the flare up of McCarthyism, Republicans, and also key Democrats, said they could not support her.

In interviews with TPM, Omarova chronicled how she went from incredulity, to frustration, to dismay as her candidacy to be a top banking regulator tanked amid a smear campaign which suggested that Omarova, born in the Soviet Union, held progressive views on banking regulation because she was some kind of secret communist.

The failed conformation reflects the lengths to which what Omarova regards as a mixture of Republicans and the banking lobby were willing to go to prevent an independent regulator from taking control. What Omarova expected to be a debate on the merits of her policy ideas immediately morphed into a debate over whether or not she was a radical, trained in the science of Marxism-Leninism, hell-bent on “nationalizing” Americans’ bank accounts and destroying the financial system as we know it.

Surviving

Born in the then-Soviet Republic of Kazakhstan in 1966, Omarova’s parents split up when she was young — a rarity for the time and place.

Her mother was busy working as a doctor, and Omarova’s grandmother raised her. The older she got, the more she learned about her family: her grandparents had been deported to Siberia under Soviet policies to sedentarize the Kazakh people; her grandmother had escaped a Stalin-era denunciation after the local KGB officer recognized that they were from the same tribe.

“He told her, ‘as soon as you can, you have to join the Communist Party, because that’s your only shield,'” Omarova recalls being told about the conversation.

The officer let Omarova’s grandmother go.

“And she raised me, telling me: you have to use a shield — don’t give them a chance to get you.”

For Omarova, that shield was education. She joined the Komsomol — the communist youth — in school as a way to clear the path to attend university. That helped catapult her — an ethnic Kazakh in the Russian-dominated USSR — to Moscow State University, where, she said, the ethnic quota system landed her in the political science department.

It was the late 1980s and, Omarova said, the cracks were showing in the Soviet Union. KGB officers briefly tailed her after protests broke out in the Kazakh Republic’s capital of Almaty. But good grades eventually earned her the university’s Lenin stipend that, she said, was roughly equal to her mother’s salary.

“It was a way to survive,” she recalls. “And whatever people say, talk is cheap — you live the life you’re given.”

Questioning loyalty

Biden announced Omarova’s nomination on Sept. 23, heralding her as “one of the country’s leading academic experts on issues related to regulation of systemic risk and structural trends in financial markets.”

Within a day, Omarova said, the full force of the opposition campaign began.

Very quickly, Omarova noticed, the campaign went from being about her policy ideas — which include more aggressive regulation of the industry and making deposit accounts at the federal reserve available to Americans — to her background.

The Wall Street Journal soon published an editorial calling her ideas “innovative — circa Moscow, 1918.”

Omarova’s policy ideas tend not to go far beyond the bounds of elite D.C. wonkery. Sen. Sherrod Brown (D-OH), who fought for Omarova’s nomination, introduced legislation last year that would require the fed to provide bank accounts for American citizens, residents, and domiciled businesses, for example.

“Where would a person even come up with these ideas?” Sen. Pat Toomey (R-PA) mused in a speech on the Senate floor. “How does it even happen that it occurs to someone to think of these things? Maybe a contributing factor could be if a person grew up in the former Soviet Union and went to Moscow State University and attended on a V.I. Lenin academic scholarship.”

Beneath the full volley of attacks, Omarova began to feel that she may have underestimated how far opponents of her candidacy would go.

A former corporate banking lawyer and George W. Bush Administration Treasury Department official who came to regard regulators as allowing the public sector to subsidize massive, risky betting by the biggest banks, Omarova anticipated a debate on policy: one that she knew the banking industry would oppose, but one that she thought she could win.

That’s not how it went.

She thought that the FBI’s requisite background check process, plus White House vetting, had been enough. But Omarova’s inbox began to fill up with inquiries from right-wing news outlets demanding to know whether she was a communist. Colleagues forwarded her emails from an opposition research firm asking them to inform on her.

What still rankles her is that the limited discussion of her policy ideas came in the form of distorted talking points — characterizing the federal reserve account proposal as a bid to “nationalize” the country’s banking industry, for example.

“I should have known better, but I have better things to think about rather than anticipate and devise what the banking lobby could come up with,” Omarova says. “One might call it my naïveté and lack of experience in fighting in the trenches, but perhaps I also thought that there would be enough space for the banking lobby to fight me on the merits of the ideas themselves if they had the decency and the guts.”

The attacks continued to mount. Omarova watched as her opponents either distorted her policy record or took cheap shots by suggesting that she was a dyed-in-the wool communist.

It was unpleasant. Hate mail, some of it racially focused, began to arrive in her inbox.

Meanwhile, Omarova tried to persuade senators on the banking committee on the merits of her ideas. The only Republican she met with, she said, was Sen. Cynthia Lummis (R-WY). She also met with a staffer for Sen. Tim Scott (R-SC).

The meetings — which she said were mainly focused on policy — gave her some hope that Republicans could be won over.

But the Nov. 18 hearing quickly dispelled that idea.

Red scare, 2021

Omarova sensed that something was coming — suggestions that she was a communist were already out there. But she regards herself as a “very forthright straight-shooter,” someone who “doesn’t speak unless I know what I’m talking about.”

She had also cottoned on to the game that was being played around her candidacy: she began to shield herself, forcing herself not to react to the attacks in the way a normal human would.

It was Sen. Kennedy who went the furthest at the hearing. He repeatedly asked Omarova whether she had resigned from the Komsomol, through a grin.

“You studied scientific communism, the science regarding the working class struggle and the communist agenda,” Kennedy noted, repeating the question: have you resigned from the young communists?

“I could not choose where I was born,” Omarova replied, telling Kennedy that her grandmother had “escaped death twice under the Stalin regime.”

What lingers in Omarova’s mind now is how the questions targeted her loyalty to the country.

“That, somehow, there is this doubt that I might not be as good an American citizen as Mr. Kennedy. And that I have a serious problem with,” she says. “Because absolutely nobody in that room had the right to question my loyalty or my choices in life.”

But over the weeks that followed the hearing, it became increasingly clear to Omarova that her nomination was dead. Three Democrats — Sens. John Tester (D-MT), Mark Warner (D-VA), and Kyrsten Sinema (D-AZ) — signaled that they wouldn’t support the nomination.

“So, if this process is dead because these Democrats decided they couldn’t stomach what they understood to be my views, what’s the point of hanging on?” Omarova asked. “I don’t expect the banking industry’s position to change in the next few weeks.”

She withdrew her nomination last week.

Being run through the political grinder has been depleting. Omarova is left still processing all the events, trying to understand how what she saw as a straightforward policy battle became so ugly and so personal, so quickly.

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