Bisignano draws scrutiny as his former company falters

Social Security Commissioner Frank Bisignano came under renewed criticism this week for his work in the private sector, as the stock price of his former company Fiserv tanked upon the rescission of long-term growth projections that executives say were too optimistic.

Shares in Fiserv, a financial technology company that processes credit and debit card payments on behalf of businesses and financial institutions, fell more than 40%, or $30 billion in market value, on Wednesday, after CEO Mike Lyons withdrew earnings forecasts originally issued by his predecessor, Bisignano. The stock price fell another 7.1% Thursday.

According to trade publication PaymentsDive, Lyons said that Bisignano’s earnings targets “would have been objectively difficult to achieve, even with the right investment and strong execution.” But instead, Fiserv had in recent years deferred needed investments and cut costs in pursuit of shoring up short-term profit margins.

Fiserv’s falling stock price drew renewed scrutiny on Bisignano, who has recently been named chief executive officer of the Internal Revenue Service in addition to his duties at SSA and as part of his transition to government work, had to offload hundreds in millions in shares in the financial company.

Between May and July, Bisignano sold roughly $530 million in Fiserv shares, Bloomberg reported. If held until today, those shares would be worth just $229 million, making for $300 million in avoided losses. On top of that, when a government official divests from their private sector assets, they receive a Certificate of Divestiture, which allows them to offset some of the capital gains tax burden and reinvest their proceeds into government securities and other diversified investments.

The withdrawal of Bisignano’s Fiserv earnings outlook could also seemingly lend credence to a lawsuit filed by investors in the company, which alleged Bisignano and other executives misled stockholders about the growth of its point-of-sale system Clover, using forced migration of existing customers to mask a lack of new business.

In a statement Thursday, Nancy Altman, president of progressive advocacy group Social Security Works, called for Bisignano’s resignation and investigation into his departure and divestiture from Fiserv, drawing parallels between the allegations of mismanagement at Fiserv and SSA’s deceptive customer service statistics.

“When Bisignano joined the Trump administration, he sold all of his Fiserv stock, getting a big tax break in the process,” she said. “That sale saved him $300 million (and counting) in stock value. Did Bisignano know that Fiserv’s stock was about to tank, and ask his friend Donald Trump for a life raft? . . . How can we trust any claims Bisignano makes about Social Security, such as his insistence that phone service is improving even as media reports show otherwise?”

Fiserv’s faltering stock price is not the only source of intrigue related to the SSA and day-to-day IRS leader. Last month, Fifth Third Bank announced it was partnering with Fiserv to administer Direct Express, the federal government’s debit card program used primarily to pay government beneficiaries who lack a traditional bank account.

That news came less than a year after the Treasury Department’s Bureau of Fiscal Service initially awarded the financial agency agreement to Bank of New York-Mellon. Bloomberg reported that BNY-Mellon struggled to find a card issuer to partner on the project, and Fifth Third and Fiserv were the original third-place bidder for the deal, which is not subject to most contracting transparency rules, after Flagstaff Bank, which passed on the renewed solicitation.

Now, Sen. Ron Wyden, D-Ore., and Rep. John Larson, D-Conn., are investigating what Bisignano knew about the possible deal during his confirmation process or whether it influenced the decision to cease offering paper checks to Social Security beneficiaries, which effectively created a bevy of new Direct Express users, according to The Baltimore Sun. In fiscal 2024, Comerica Bank, who administered the program from the 2000s until earlier this year, was paid $920,564 to administer Direct Express.

The Social Security Administration did not respond to requests for comment on Fiserv’s recent stock performance, Bisignano’s divestiture, his knowledge of Fiserv’s underperformance or the re-awarding of the Direct Express contract. In a statement to The Sun, the agency said that the commissioner complied with “all obligations” under his government ethics agreement.