Feuding? At the SEC? Never!

Despite talk that Chairman William Donaldson differs often with his two fellow GOP commissioners, 5-0 rulings are the norm

By Amy Borrus

William H. Donaldson wants to set the record straight. The Republican chairman of the Securities & Exchange Commission is fed up with media reports that he presides over a divided commission and typically sides with the panel's two Democrats, Harvey J. Goldschmid and Roel C. Campos, against Republicans Paul S. Atkins and Cynthia A. Glassman (an impression that can't help his standing in the White House).

So the 73-year-old SEC chief asked a staffer to tally the number of times the five-member commission has split on a vote since he took office in mid-February, 2003, through May 24, 2004. The surprising result: Of 1,606 total votes, all but 16, or 1%, were 5-0 decisions. "There really isn't a tremendous amount of dissension," says SEC spokeswoman Laura Cox.


  Most of the split decisions were on undisclosed enforcement matters. One of the few breaks on policy occurred on Feb. 25, when the commission voted 4-1, with Atkins dissenting, to propose a requirement that mutual funds impose a mandatory 2% fee on fund investments held less than five days.

Does that mean SEC vote divisions have been greatly exaggerated? Yes -- and no. While actual divided votes have been few, the two GOP commissioners have expressed strong concerns about some of Donaldson's priorities that have yet to come to a vote: mutual-fund governance, hedge-fund regulation, and a way to make it easier for shareholders to nominate directors on company proxies, for example.

The divide is likely to be on display on June 23, when the commission votes on whether to require that 75% of mutual-fund directors, including the chairman, be unaffiliated with the fund's management company. Atkins and Glassman aren't convinced that fund chairman need to be independent in all cases. Watch for a split decision -- 3-2 in favor of the new requirement.

Borrus is a correspondent in BusinessWeek's Washington bureau

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