Elizabeth Warren Asks Obama to Demote Wall Street’s Top Cop

  • Senator cites SEC chair’s failure to act on political spending
  • President says Mary Jo White is still right person for the job

Senator Elizabeth Warren has taken her disapproval of U.S. Securities and Exchange Commission Chair Mary Jo White to a new level by calling on President Barack Obama to replace her.

The Massachusetts Democrat urged Obama to use his authority to demote White and make one of the other SEC commissioners chair, arguing that White hasn’t pursued rules that would force corporate donors to disclose political contributions, according to an Oct. 14 letter addressed to the president. White’s refusal to take a stand hurts investors and has undermined the administration’s own policy to address political disclosures, Warren said.

“I do not make this request lightly,” Warren wrote. “The only way to return the SEC to its intended purpose is to change its leadership.”

In response, White House spokesman Eric Schultz told reporters Friday that “the president continues to believe that Chair White is the right leader” for the agency. Gina Talamona, a spokeswoman for White, declined to comment.

Frequent Critic

Warren has been a frequent critic of White, attacking her over what she sees as the agency’s failure to go after wrongdoers as well as the political disclosures rule. She told Bloomberg News earlier this year that White is one of the biggest disappointments in the Obama administration and sparred publicly with the SEC chair at a Senate hearing in June. Democrats have made reining in the influence of big money a top priority during this year’s election campaign.
When Obama nominated White in 2013, he said the former federal prosecutor had the experience and resolve to root out reckless conduct on Wall Street. He added that she had a reputation for being tough, saying, “You don’t want to mess with Mary Jo.”

Warren’s letter to Obama -- whose term ends in January -- foreshadows how the senator will likely attempt to influence the next president’s cabinet and other key nominations, particularly if Hillary Clinton wins and the Democrats control the Senate. Several positions that are important to Wall Street, including chair of the SEC, must be affirmed by the Senate Banking Committee, where Warren is a member. Warren has successfully blocked prior candidates that didn’t fit her criteria.

Citizens United

Democrats have pushed the SEC to enact new disclosure requirements after the U.S. Supreme Court’s 2010 decision in the Citizens United case, where it ruled that companies and unions could spend unlimited money on election ads. Republican lawmakers passed a measure in December 2014 that barred the SEC from approving a rule, though Warren says White still could work on a regulation in preparation for when the prohibition lapses.

She urged Obama to “make clear in advance" that he will veto any bill that would prohibit the SEC from issuing a final rule requiring public disclosures, according to the letter.

Only three of the SEC’s five seats are currently filled. In addition to White, the two commissioners are Kara Stein, a Democrat, and Michael Piwowar, a Republican. SEC chairs routinely step down after a new president takes office.

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