November 02, 2023

Ahead of Confirmation Vote, Senator Warren Releases New Information on Medicare and Social Security Public Trustee Nominee’s Financial Conflicts of Interest

Demetrios Kouzoukas Will Receive Stock Worth Almost $200,000 This Year for Service on Board of Private Insurer Clover Health, Refuses to Step Down if Confirmed “This is a textbook case of how conflicts of interest impact the policy process — and why you should not be put in such a position.”

Text of Letter (PDF)

Washington, D.C. — United States Senator Elizabeth Warren (D-Mass.) sent a letter to Demetrios Kouzoukas, President Biden’s nominee to serve as Public Trustee on the Boards of Trustees for the Social Security and Medicare trust funds, raising additional concerns about Mr. Kouzoukas’s financial conflicts of interest following disturbing new revelations, and reiterating her request that he commit to leave his Board of Directors role at Clover Health or withdraw his nomination.

“As a Public Trustee, you would have a duty to act in the interest of the American people while making projections and recommendations about the financial status of the Medicare trust funds,” wrote Senator Warren. “There is an irreconcilable conflict between your role at Clover Health – which has richly rewarded you for your efforts to help the company enrich itself at Medicare’s expense – and your role as a Public Trustee.”  

Sen. Warren first raised concerns about these conflicts of interests at Mr. Kouzoukas’s nomination hearing in September, and sought additional information, which she released today. This previously undisclosed financial information indicates that Mr. Kouzoukas expects to receive almost $200,000 worth of restricted stock from Clover Health this year – nearly ten times as much as he received in 2021 and 2022. 

“It also appears that the company offered you this massive increase in compensation after you and other company officials became aware that you would be nominated for the Public Trustee position,” wrote Senator Warren. “And this stock would vest in 2024 – providing you access to the full value of this reward from Clover Health at the same time you would be serving as a Public Trustee.”

“The conflicts of interest between your role as a highly paid Clover Health board member and a Public Trustee cannot be reconciled,” wrote Senator Warren. “Given this conflict, I ask that you commit to leaving the Clover Board if confirmed, or withdraw your nomination.” 

At his nomination hearing, Mr. Kouzoukas also dodged specific questions about whether his actions as a Trustee would affect the profitability of Clover Health, saying that, to his knowledge, “the Trustees’ Reports have not discussed topics like ‘overpayments’ to Medicare Advantage plans.” However, Trustees’ Reports from 11 out of the last 13 years each discuss Medicare Advantage payment rates, risk scores, or quality bonus payments – issues that both relate to overpayments and would directly impact Clover Health.  

“Your refusal to acknowledge this important component of the Trustees’ report reveals that you are either unaware of the full scope of your conflicts of interest, or unwilling to acknowledge them,” wrote Senator Warren. “And if you are unable to identify or acknowledge your conflicts, they cannot be resolved.”

Finally, Senator Warren rebutted Mr. Kouzoukas’s claim that the Trustees “do not make policy.” She noted that the Social Security Administration defines the Trustees’ role to include “(r)eview(ing) policies followed in managing trust funds and recommend(ing) changes,” and that Mr. Kouzoukas himself described how he would be involved in “internal dialogue and deliberations” about the trust funds, concluding that “this is a textbook case of how conflicts of interest impact the policy process.”

Given these concerns, Senator Warren is again requesting that Mr. Kouzoukas commit to resigning from his position at Clover Health if confirmed.