From Our Future
The Securities and Exchange Commission (SEC) is supposed to regulate Wall Street. But it has become a "captured" agency, using its power to block regulation of Wall Street instead of enforcing regulation of Wall Street. Now Senator Elizabeth Warren (D-Mass.) is fed up and has asked President Obama to remove the current chair because of her "extraordinary, ongoing efforts to undermine the agency's central mission."
Mother Jones reports the story in "Elizabeth Warren Asks Obama to Remove His Top Financial Regulator":
"Sen. Elizabeth Warren demanded Friday that President Barack Obama demote his top financial regulator, Securities and Exchange Commission Chairwoman Mary Jo White, who's held the position since 2013. The Massachusetts Democrat raised numerous objections in a letter to White's tenure atop the SEC, narrowing in on White's resistance to writing regulations that would compel corporations to reveal their political spending habits. By refusing to rein in how corporations can spend money, Warren argued, White has allowed dark money to explode under her watch.
"'I do not make this request lightly,' Warren's letter concluded. 'I have tried both publicly and privately to persuade Chair White to direct the agency's resources toward pressing matters of compelling interest to investors and the public, and toward completing those rules that Congress has required it to implement. But after years of fruitless efforts, it is clear that Chair White is set on her course. The only way to return the SEC to its intended purpose is to change its leadership.'"
President Obama cannot fire White, but can "demote" her by keeping her as a commissioner while moving a different commissioner to be chair. Doing so would send a message that regulators cannot openly work for Wall Street to undermine the regulations they are supposed to enforce. These regulators are "captured" by the "revolving door" understanding that they can collect a fortune from the companies they are supposed to regulate after they leave government, as long as they play along while in government.
Chairwoman Mary Jo White became chair of the SEC on April 10, 2013. Demonstrating how the "revolving door" works, the previous chair, Mary Schapiro, left to become a high-paid lobbyist with Promontory Financial, fighting the SEC and other Wall Street regulators. The April 2013 post, "CEO Pay And SEC Delay," looked at this, explaining in a section titled Revolving Door And Captured Regulators that, "After delaying and delaying the regulations, the head of the SEC left to take a high-paying job with a 'bank consulting' firm." The firm helps "capture" regulatory agencies by hiring regulators who play ball,
"[White]'s among many there who are former Washington officials. In fact, Promontory already had a former SEC chair on its roster -- Arthur Levitt is on the firm's advisory board.
"Also associated with the firm are Laura Unger from the SEC; Alan Blinder, who was a vice chairman at the Federal Reserve; Frank Zarb, who headed the Nasdaq Stock Exchange in the 1990s; and Paul Tagliabue, the former commissioner of the NFL. In all, the firm has about 400 employees, about a quarter of which are former regulators."
Promontory Financial is only one example of the way "revolving door" regulators collect their payoffs when they leave government.
So with Schapiro moving through the revolving door to collect her reward, White became SEC Chair after a softball confirmation process -- when the Senate had a Democratic majority. In March 2013, Bob Borosage wrote about White's confirmation hearing, in Mary Jo White at SEC: Watchdog or Lap Dog? The CEO Pay Test:
"She and her husband, John White, are pristine examples about how to cash in on the revolving door between government service and private practice. After serving as a public prosecutor, White made millions defending top Wall Street banks and major companies at Debevoise and Plimpton. Recent clients included JPMorgan Chase on cases arising form the financial crisis, News Corporation over its phone hacking, former Bank of America CEO Ken Lewis on the shady parts of the bank's takeover of Merrill Lynch. Not surprisingly, Jamie Dimon, the head of JPMorgan Chase, has hailed her as the "perfect choice" to head the SEC."
Also in March, 2013, Isaiah J. Poole wrote, in "A Low Bar Set For Mary Jo White At SEC Confirmation Hearing":
"We were hoping that the Senate Banking Committee would give Mary Jo White, President Obama's choice to be chairman of the Securities and Exchange Commission, a tough grilling at today's confirmation hearing. What we got most often instead looked more like a friendly backyard grill party."
Among the many things White has done to undermine the agency's regulatory role are blocking the agency from requiring corporations to disclose to shareholders their spending on political activity, and long-delaying a rules requiring corporations to disclose the ratio of pay difference between top executives and regular employees.