SEC's Future Up for Debate
As the Bush administration makes plans for its second term, a looming question is whether Securities and Exchange Commission Chairman William Donaldson will remain a part of it.
The Associated Press reported that while Donaldson's term isn't up until 2007, business groups are pressuring the administration to replace him with someone more sympathetic to their interests.
Donaldson, a Republican and former investment banker who previously led the New York Stock Exchange as well as Aetna Inc., has surprised many in the business community by being a staunch advocate of reform, a chairman who is willing to cross party lines to vote his conscience.
He has supported a number of plans that the business community strongly opposed, including advocating stricter controls over the mutual fund industry and enhanced oversight of the financial sector, the AP reported.
"Put 200 executives in a room, they will say we have seen enough regulation and legislation to stop for a while. But is that really the truth? ... We still need more effective regulation," Paul Lapides, director of the Corporate Governance Center at Kennesaw University in suburban Atlanta, told the AP.
With the insurance industry the latest to be hit by scandal-on the heels of the mutual fund industry and massive corporate meltdowns at Enron, WorldCom and others-Donaldson's reform efforts have been heralded by many.
Donaldson replaced Harvey Pitt in 2003 after Pitt's tumultuous 14-month tenure that embarrassed the Bush administration. The SEC has also been lapped in recent years by the aggressive corporate crime-fighting campaign led by New York Attorney General Eliot Spitzer, the AP reported. However, the SEC has taken the lead on accounting fraud investigations involving HealthSouth Corp. and Qwest Communications International Inc.
On the flip side, Donaldson has refused to take quick action to appease shareholder groups who have sought more power to nominate corporate board candidates, the AP reported.
In comments to reporters after a speech to the annual meeting of the Securities Industry Association, Wall Street's biggest trade group, Donaldson didn't show his cards entirely.
"I serve at the pleasure of the president. Having said that, I also serve at my own pleasure. And by that I mean, I believe that there are a number of things we're working on, a number of things I know we're accomplishing, and as long as we're accomplishing those things, that's pleasing," he said.