Last Friday, Kara Stein was sworn in as SEC Commissioner – Mike Piwowar will be sworn in this week. Perhaps due to this, the process of selecting a SEC Commissioner has been in the news lately. Last week, Floyd Norris devoted his NY Times column to the process, comparing recent appointees to some made a few decades ago. Floyd is critical and believes the current process is too political, reflected in the title of his column, “Independent Agencies, Sometimes in Name Only.” Here’s an excerpt:
Of course, members of Congress always had influence, and presidents have sought advice and engaged in horse trading. But Harvey Pitt, who worked on the S.E.C. staff from 1968 to 1978, rising to general counsel, said things had changed by the time he returned as chairman in 2001. By then, he said, presidents were expected to nominate the people chosen by the opposition party’s senior senators, unless there was something clearly wrong with the person.
Mr. Pitt said he thought that began on a more formal basis after the Republicans took control of Congress in 1994, when Bill Clinton was president. Mr. Pitt, who was appointed chairman by President George W. Bush, said that his recommendations and approval were sought by the White House for prospective Republican commissioners, but that while he met with Democratic choices before they were nominated, he did not feel he — or the White House — had much leeway in choosing whether to appoint them.
Now, there is some evidence that the president generally gets to choose the chairmen of independent commissions, but the other majority members are picked on Capitol Hill.
And in this Q&A with departing SEC Commissioner Elisse Walter – published in the Washington Post on Friday – Elisse answers the question of “What did it take to land the position of SEC commissioner?” by answering:
I started thinking about the job in the mid- to late ’80s. I wanted to be one of the ultimate decision makers. I never thought it was a realistic possibility. But in the early 2000s, I thought I should try to do this. I called everyone I knew, either because they occupied the position or because they knew something about how Capitol Hill works. The recommendations for commissioner slots mostly originate from Capitol Hill, and the president does the nominating. But I didn’t get the job.
Then there is the follow-up question of “Six years later, when you were working at FINRA, you finally got nominated as an SEC commissioner. How did that happen?” with an answer of:
Sen. Jack Reed called [FINRA’s then-chief executive] Mary Schapiro. A Democratic seat on the commission had opened up and he asked Mary for a recommendation. She gave him my name. You need a rabbi to get you through the process. When the right people are willing to sign on and support you, it just happens. I remember early on in my tenure, a group of business-school students asked me: “How do you become a commissioner?” I think the answer is serendipity. There isn’t a career path.
More on the “Revolving Door”
Recently, the Washington Post ran this lengthy article exploring Promontory Financial Group, the consulting firm where former SEC Chair Mary Schapiro landed. The piece takes potshots at Promontory because of the numerous former regulators that work there. I’m still adamant that the so-called revolving door is not what it seems – and that most regulators are true to their mission when they work within the government.
In what other industry are people not supposed to never leave their jobs? Once you work for the government, you’re stuck for life?
Tom Kim, who recently departed as Corp Fin’s Chief Counsel, has joined Sidley Austin in its DC office…
The InVU Platform
– Why did you launch InVU?
– What can it do that other platforms can’t?
– Any surprises since you launched?
– Broc Romanek