Biden’s Pick to Oversee Banks Withdraws After Racist ‘Communist’ Smear Campaign

Saule Omarova, President Biden’s nominee to head the Office of the Comptroller of the Currency (OCC), has withdrawn her nomination following a smear campaign that falsely identified her as a communist, because Omarova was born in Kazakhstan and attended Moscow State University.

“I deeply value President Biden’s trust in my abilities and remain firmly committed to the Administration’s vision of a prosperous, inclusive, and just future for our country,” Omarova wrote in her letter to the White House requesting the withdrawal of her nomination. “At this point in the process, however, it is no longer tenable for me to continue as a presidential nominee.”

The OCC plays a major role in regulating and overseeing US banks, and Omarova, a professor at Cornell University, has published extensive research and proposals on how to do so. In one of her papers, Omarova proposes that the Federal Reserve provide consumer banking services as a “more efficient alternative” to private banks, and has called for assigning a government representative to the board of any banking institution whose size could present a risk to the broader financial system. She’s also been an outspoken critic of Wall Street for years.

Given Omarova’s record of progressive ideas, she faced an uphill battle to be confirmed by the Senate. But the questioning directed at her — including being asked by Republican Sen. John Kennedy whether he should address her as “professor or comrade” because of Kazakhstan’s history in the Soviet Union — still came as a shock, and a reminder of the dark, ongoing legacy of the ‘50s Red Scare today.

“Senator, I’m not a communist,” Omarova told Kennedy, “I do not subscribe to that ideology. I could not choose where I was born.” She also told the Senator her grandmother “escaped death twice under the Stalinist regime,” and that she’s “proud to be an American.”

President Biden has responded to Omarova’s withdrawal in a statement calling her “a strong advocate for consumers and a staunch defender of the safety and soundness of our financial system” and criticizing the smear campaign orchestrated by her opponents. “Unfortunately, from the very beginning of her nomination, Saule was subjected to inappropriate personal attacks that were far beyond the pale,” he said.

The attacks on Omarova and her fictionalized ties to communism, which she vehemently denies, are eerily similar to the tactics and talking points of McCarthyism, which stoked widespread fear of communist, anarchist, and socialist ideologies at the height of the Cold War between the US and the Soviet Union. Throughout the 1950s, anyone suspected of even vaguely sympathizing with left-wing politics could face arrest, lose their jobs, be blacklisted in their industry, and subjected to invasive government surveillance.

Almost no one was safe from the Red Scare, but amid the Korean War and China’s role in it, Asian Americans faced particular scrutiny and suspicion from neighbors and the government. The anti-Asian racism and perceived connections between Asian identities and communism stoked by the Red Scare persist to this day, and almost certainly played a role in the accusations Omarova faced of being a communist.

Notably, despite Omarova’s progressive views and criticisms of Wall Street, she’s previously worked in the U.S. Treasury Department during the George W. Bush administration, indicating she’s hardly a partisan. Still, Senate Republicans and even moderate Democrats, including Jon Tester, Mark Warner, and Kyrsten Sinema, opposed Omarova’s nomination, effectively tanking her chances at being confirmed.

Omarova’s withdrawal is ultimately disappointing for a number of reasons, not the least of which include that the financial sector — with its long history of screw-ups that have been devastating to the economy, not to mention its routine predation of the poor and communities of color, and rampant, widely covered up sexual abuse — was in sore need of progressive oversight. But it’s also an ominous indication that the Red Scare, arguably the real “cancel culture,” is still very much a thing, and public fears of the foreign, subversive, radical other can still be exploited to this day.