In a sense, we can consider William Donaldson’s tenure at the Security and Exchange Commission a rare example of Bush admitting a mistake. The White House tapped Donaldson to replace Harvey Pitt over two years ago, and expected Donaldson to follow the conservative line on corporate regulation. Which is to say, ignore and disregard all corporate regulation.
But a funny thing happened. Donaldson, a longtime friend of the president, actually took his job seriously and refused to kowtow to the demands of Big Business. Indeed, he routinely sided with SEC Dems, hired a small army of corporate regulators, and began (gasp!) enforcing securities law.
As far as Donaldson was concerned, he was doing a good job and wanted to continue to do so.
Mr. Donaldson, a 73-year-old former Wall Street executive and longtime friend of the Bush family, quietly has let it be known to the White House that he would like to remain as the nation’s top securities cop. But the business lobby, fed up with what it believes is an overzealous SEC and a chairman who has been a tougher regulator than expected, has made it equally clear that it would like nothing more than to see Mr. Donaldson gone.
Indeed, the Business Roundtable, United States Chamber of Commerce, and Republicans in general fought to have Donaldson replaced with someone who would be less stringent about holding corporations accountable. Yesterday, they got their wish; Bush fired Donaldson.
Predictably, Bush’s would-be replacement will do far better in following Corporate America’s instructions.
Acting quickly, President Bush on Thursday named conservative Rep. Christopher Cox to lead the Securities and Exchange Commission. Cox would succeed William Donaldson, who announced the day before he was stepping down after 28 months on the job.
With Cox at his side at a White House ceremony, Bush said the lawmaker is “a champion of the free enterprise system in Congress. … He’ll be an outstanding leader of the SEC.”
Or maybe not. Cox’s experience in the area includes taking a leadership role on the Private Securities Litigation Reform Act, which weakened investor protections and “limited the liability of accountants who blew audits and of others who were found guilty of fraud.”
Cox has also accepted more than a quarter million dollars from the securities and investment industry, in addition to having been sued for “misleading regulators and investors about the condition of a real estate investment fund” in the 1980s. To fully understand his approach, don’t forget that Cox even defended Enron’s crimes.
In fact, the only time Cox believes in government oversight of large corporations is when the corporation offends his political sensibilities. When CBS ran a report on Bush’s failure to do his National Guard duty and relied on dubious documentation, Cox was among the first to call for a congressional investigation into the network.
I’m noticing a bit of a pattern here. When Bush needs an ambassador to the United Nations, he picks someone who doesn’t believe the U.N. should exist. When he needs an attorney general, he picks someone who believes the president is above the law. When he needs a Securities and Exchange Commission chairperson, he nominates someone who rejects the very idea of securities crimes.
Cox’s nomination will need Senate confirmation. Bush is daring Senate Dems to raise a fuss. The Dems shouldn’t waste the opportunity.
Update: Don’t miss this from comments section. Classic.