Democrats brawl with SEC chief

One of President Obama’s top financial regulators is facing a barrage of criticism from fellow Democrats.

Mary Jo White, the chairwoman of the Securities and Exchange Commission, was repeatedly attacked Tuesday by Democrats on the Senate Banking Committee.

{mosads}Sen. Charles Schumer (D-N.Y.) went so far as to suggest that White contributed to the political environment that enabled the rise of presumptive Republican presidential nominee Donald Trump as he excoriated her for refusing to consider rules that would require public companies to disclose any political spending.

“You want to know why people are so discontent? It’s in part because of a few powerful people who send out a cascade of ads,” he said. “You frankly are aiding and abetting it at the SEC.”

“You are hurting America,” he added.

Democrats are frustrated with White and the SEC for refusing to consider new rules that would require corporations to disclose their political spending. They say the move is needed in response to the 2010 Supreme Court decision Citizens United v. FEC that allowed corporations to spend unlimited amounts on politics.

They say the political spending of
corporations is of interest to investors, so the SEC should establish rules requiring public companies to disclose it.

But the SEC has repeatedly rebuffed public campaigns to initiate the rulemaking process. And White made clear Tuesday that the rules are not in the pipeline because the agency had its hands full with other projects.

That message was not received well by Democrats.

The tension spilled over in an exchange between White and Sen. Elizabeth Warren (D-Mass.), who accused the regulator of putting “the interest of the Chamber of Commerce and its big business members at the top of your priority list.”

Warren took issue with a project begun by White to examine whether investors face an “information overload” when it comes to publicly disclosed information. Since 2014, White has directed the SEC to examine whether it can streamline what information is made available to investors, arguing the current process can be confusing and unhelpful.

But Warren argued the SEC should be looking at requiring more disclosure, rather than less, and contended the project is trying to address a problem that may not exist.

“Instead of moving forward on issues intended to help investors, you’ve actually headed in the opposite direction,” she said.

White and Warren interrupted each other multiple times as the discussion grew contentious.

Warren, who is no stranger to criticizing White, went so far as to say her opinion of the SEC chief has never been lower.

“I am more disappointed now than ever,” said Warren as she closed her remarks.

White did not let the comment go unnoticed.

“I’m disappointed in your disappointment, and I could not disagree more with your characterization,” she said in response.

Democrats have tried to get White to agree to at least begin work on a political spending rule. The government funding package Congress passed at the end of 2015 included a provision that barred the SEC from using funds to implement such a rule, but Democrats argue that does not apply to the regulator preparing to write the rule, which would allow it to move quickly once that provision expired with the next funding package.

Political spending disclosure wasn’t the only area where White and Democrats differed on Tuesday. She also had to fend off leftward attacks on whether the SEC is a tough enough regulator, why it takes so long to write rules implementing the Dodd-Frank financial reform law, and why it is prioritizing some projects over others.

The sparring at Tuesday’s hearing was a stark contrast from White’s first appearance before Congress, back when she was only a nominee. The respected white-collar defense attorney sailed through the confirmation process in 2013, and was ultimately unanimously confirmed by the body.

But the SEC has faced consistent fire from Democrats who want to see the regulator pursue stricter penalties against financial wrongdoers, and who also complain that the regulator lags behind other government watchdogs in writing key rules implementing Dodd-Frank.

“Time and again, we see repeat offenders enter into settlement after settlement that seem to have no effect on stopping the activity in the first place,” said Sen. Sherrod Brown (D-Ohio), the top Democrat on the panel. “At what point is the SEC going to stop handing out warnings and start giving tickets?”

By comparison, most of the questions from Republicans were downright friendly.

Banking Chairman Richard Shelby (R-Ala.) praised the SEC for resisting “political pressure” to establish a political spending rule.

However, sympathy for the SEC among Republicans only goes so far. White criticized a House GOP spending bill advanced last week that would cut $50 million from the agency’s current $1.6 billion budget. White said lowered funding would “seriously imperil” the agency work.