SEC Nominee White’s Disclosure Report Shows Possible Conflicts
Mary Jo White, President Barack Obama’s nominee to lead the U.S. Securities and Exchange Commission, said she will avoid some matters involving firms including JPMorgan Chase & Co., General Electric Co. and Deloitte & Touche LLP if confirmed by the Senate.
White, a former U.S. prosecutor who is retiring as a partner in the law firm Debevoise & Plimpton LLP, outlined her recusal plans in cases involving former clients in a letter accompanying her financial disclosure report. She reported earning more than $2.4 million from her partnership stake last year.
The report, which also lists former Bank of America Corp. Chief Executive Officer Kenneth D. Lewis, former Goldman Sachs Group Inc. director Rajat Gupta and UBS AG as clients, underscores White’s longstanding ties to Wall Street as a top defense lawyer. She may face questions over potential conflicts of interest at her Senate confirmation hearing, which hasn’t been scheduled.
Obama nominated White for SEC chairman on Jan. 24, praising her tenure as U.S. attorney for the southern district of New York from 1993 to 2002. She will be a “cop on the beat” of the financial system and help “complete the task of reforming Wall Street,” the president said.
In her letter, White wrote that “for a period of one year after my retirement” from the law firm, she would “not participate personally and substantially in any particular matter involving specific parties in which Debevoise & Plimpton LLP is a party or represents a party.”
Under an executive order signed by Obama in 2009, White must sign an ethics pledge that forbids her from participating in particular matters involving former clients or Debevoise for two years.
The two-year pledge is written in a way that could allow White to work on some issues that have ties to Debevoise or her former clients, said Kenneth A. Gross, a partner at Skadden, Arps, Slate, Meagher & Flom LLP.
“This would give her a good bit of latitude to regulate a former client because this restriction is narrow,” said Gross, who advises political appointees on government ethics laws.
Scott H. Kimpel, a former counsel to SEC commissioner Troy A. Paredes, said White’s participation in SEC business related to Debevoise or former clients would have to be reviewed by the SEC’s office of ethics counsel.
Enforcement cases, rather than regulatory votes, would be most likely to raise potential conflicts of interest for White, Kimpel said in a phone interview. Some commissioners recuse themselves from any issues involving former clients or law firms during their entire term at the SEC, Kimpel said.
“Anytime Debevoise is a defense counsel in the enforcement space, she is going to have to recuse,” said Kimpel, now a partner at Hunton & Williams in Washington.
White’s other clients at Debevoise have included News Corp.’s independent directors, Microsoft Corp. and officers of MoneyGram International Inc. She also has represented Howard Udell, a Purdue Pharma LP general counsel who pleaded guilty to criminal charges of misrepresenting the prescription painkiller OxyContin as less likely to be abused than other narcotics.
She and her husband, John W. White, have grown wealthy during more than three decades as elite New York lawyers. The couple reported assets valued between $9.9 million and $41 million, largely in index and exchange-traded funds, according to her financial disclosure report. The form requires administration nominees and officials to disclose the value of assets as a range, not a specific figure.
The couple reported income of between $3 million and $8.7 million during 2012, including her salary at Debevoise. John White, who was the director of the SEC’s corporation finance unit from 2006 to 2008, is a partner at Cravath, Swaine & Moore LLP.
In her ethics letter, Mary Jo White wrote that she would receive a lump-sum retirement payment from Debevoise upon confirmation as SEC chairman. The letter doesn’t indicate how much she would receive, though the disclosure form indicates she is eligible to receive $42,500 a month at retirement.
She wrote in the letter that she will forgo a retiree benefit that entitles her to use of “secretarial services, office space and a BlackBerry at the firm’s expense.”
White will also get a payout of money she contributed to Debevoise as an equity partner. Her disclosure form values her interest in the firm at between $500,001 and $1 million.
She also said in the letter that she will avoid participating in matters involving three private investment funds in which her husband is an investor. He plans to divest his interest in the funds if she is confirmed, according to the letter.
John White has agreed to not communicate with the SEC “on behalf of the firm or any client” while his wife is chairman, she wrote in the letter. His practice involves advising firms on public reporting requirements and corporate governance matters, according to Cravath’s website.
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