As readers may know, Obama’s plan to keep the already weak SEC in its role as a rubber stamp to Big Finance is going pear-shaped. Via some unexpected good fortune (Obama owing a favor to Rhode Island senator Jack Reed and Senate conventions that nominations of Senate staffers get approved) the SEC wound up with a new commissioner, Kara Stein, who actually knows a thing or two about banking and has been willing to declare war on a chairman from her own party, Mary Jo White. Stein has been more effective than someone in her spot would normally be by virtue of White being so badly conflicted as to be required to sit out many commission votes, and Stein allying regularly with fellow Democrat commissioner Luis Aguilar to block unduly Wall-Street-friendly measures.
But Obama appeared ready to restore status quo ante by virtue of having Aguilar’s term expire this year. That would allow him to install a more business-toadying replacement.
The Administration is changing course after having run into a buzz saw of opposition. Readers may recall we encouraged letter-writing as well as signing a Credo campaign to fire Mary Jo White. Although the SEC chairman can’t be ousted by the Administration, the well-warranted campaign against her was meant to tell the Administration that another Mary Jo White type commissioner was going to be hard to confirm.
From Obama SEC pick delayed by backlash from Warren allies in Politico:
Elizabeth Warren and her liberal allies appear to be on the verge of another victory in their battle to stop the White House from choosing financial regulators with ties to Wall Street.
President Barack Obama was planning to nominate corporate attorney Keir Gumbs… But now that’s on hold at least until August after activist groups aligned with Warren raised an outcry over Gumbs’ work, including his advice to companies on how to dodge scrutiny from shareholder activists.
The White House will begin vetting additional candidates who don’t have corporate relationships to fill the seat being vacated by Democrat Luis Aguilar…
The nomination battle comes as Warren and activist groups have been turning up the heat on the SEC. The Massachusetts senator last month wrote a scathing public letter to Chair Mary Jo White, accusing her of being soft on financial enforcement. Two weeks later, activist groups launched a website — nomoremaryjos.com — and sent Obama a letter criticizing the revolving door between Wall Street and the SEC…
Activist groups such as Public Citizen have objected to Gumbs’ work representing the American Petroleum Institute before the SEC and his work involving corporate campaign-spending disclosure, a contentious issue for the SEC since the Supreme Court’s Citizens United decision in 2010.
Warren, other Democrats, and labor unions have been urging the SEC to require companies to reveal their political spending through nonprofits and political-action committees after Citizens United allowed independent groups to raise and spend unlimited campaign contributions…
Earlier this year, Gumbs and his colleagues at Covington wrote an article advising companies on how to deal with activist shareholders who are pressuring them to voluntarily reveal their political spending…
Progressives’ preferred candidate is said to be Jennifer Taub, a professor at Vermont Law School who has written critically of regulatory relief for Wall Street.
I’ve omitted handwringing about how hard it would be for the agency to do its work without a full complement of commissioners. Even though Aguilar’s term ended June 5, he can continue for the rest of this year if a replacement has not been confirmed.
Needless to say, the spectacle of Warren and her allies has led Politico to launch an attack in the form of another article that ran yesterday, Did Elizabeth Warren go too far this time? Warren was similarly excoriated for being too uppity when she dared successfully oppose the White House’s nomination of Lazard’s Antonio Weiss to be assistant secretary of the Treasury, a position for which he had no relevant expertise.
The subhead to the story makes it clear who is upset with Warren:
The Massachusetts senator’s attack on Securities and Exchange Commission Chair Mary Jo White causes backlash on Wall Street.
That’s a feature, not a bug. And notice several things about the article: it depicts Warren as going solo, when she’s part of a group of progressive Democrats, as well as aligned activist groups. And the article fulminates about a letter Warren over a month ago wrote blasting Mary Jo White ; it’s only now that she has drawn blood that Politico deigns to reprimand her.
This bill of particulars would almost be funny if it wasn’t such an abject misrepresentation:
The backlash against Warren was the latest indication that populist firebrand’s efforts to push for tougher financial regulation may be losing some momentum. She failed to stop Obama’s push for trade promotion authority in the Senate last month, though she’s still trying to convince House Democrats to deny the president the votes he needs to pass the bill and thereby crush a major legacy item for him. She’s had trouble finding co-sponsors for a bill regulating auto-dealer loans. And Tuesday, liberal groups shut down their efforts to recruit her to run for president, finally acknowledging that she’s not going to get into the 2016 race.
The Senate was supposed to be smooth sailing for the Administration to get the TPA approved; in fact, that’s why the vote was scheduled there first, to give the impression of momentum and approval from Democrats before taking it to what was expected to be a fight in the House. The fact that the Administration got a stunning rebuke in the form of a vote against one of the key components in its Senate vote, that of the Trade Adjustment Assistance, was a huge, unexpected win for Senate Democrats like Warren. Similarly, Warren made it clear repeatedly that she was not running for President; even so, the unauthorized “draft Warren” initiative lasted longer than it should have.
You can see Politico undercut its thesis in the very next paragraph:
Still, some Democrats worry that Warren in her sharp attack on White, the most prominent female regulator in Washington, is now pushing the party even farther to the left in ways that could complicate the election prospects for likely nominee Hillary Clinton as well as the party’s congressional candidates. Warren’s outsized political presence is already putting pressure on Clinton to declare where stands on issues including free trade deals — which the public broadly supports — and busting up the nation’s largest banks.
If Warren is losing steam, how can she possibly be “pushing the party even further to the left” (which charitably depicts it as left-leaning to being with), much the less have an impact on the 2016 campaign as a non-candidate? The mere fact that Hillary is having to calibrate her messaging in light of what Warren is up to (no mean feat given how deep the Clintons’ Wall Street ties are) is proof in and of itself that Warren continues to punch above her weight.
Please call your senators (numbers here). Tell them you are glad to see that Obama is getting the message by pulling back his plan to nominate Covington & Burling corporate crony Keir Gumbs and that you hope he will chose someone who is a knowledgeable as well as a strong advocate of tough regulation like Jennifer Taub. Please call and Warren’s office to thank her if you have time. And thanks to all of you for your past efforts on this front!