More than 400 former officials from the U.S. Securities and Exchange Commission filed nearly 2,000 lobbying disclosure forms between 2001 and 2010 saying they would be representing an employer or client before the federal government's chief Wall Street regulator, according to an investigation by the Project on Government Oversight.
"Those disclosures are just the tip of the iceberg, because former SEC employees are required to file them only during the first two years after they leave the agency," said POGO, an independent investigative Washington-based non-profit that released a report on its investigation today.
The POGO report shines a spotlight on a phenomenon academics long ago dubbed "regulatory capture," the process by which major players in a publicly regulated private industry influence regulatory policy-makers' decisions, either by retaining former regulators as lobbyists or by getting sympathetic individuals appointed to key positions in the government panels.
POGO said its investigation focused on "how the revolving door affects the SEC's regulation of Wall Street, its granting of relief to specific companies, its handling of cases related to the financial crisis, or its decisions to drop investigations without bringing charges. The study sought to quantify any influence the revolving door might have on SEC enforcement actions, but the subtleties involved do not lend themselves to such simple measurement."
Among the multiple examples examined in the POGO report are those James L. Kroeker, who left the SEC last July, and Mary Jo White, President Obama's nominee as SEC chairman.
"In December 2012, Deloitte, one of the 'Big Four' global accounting firms that cater to big corporations, announced that it had hired [Kroeker] who will be reporting directly to Deloitte's CEO, who, in a press release, praised Kroeker's 'unique perspective' and 'experience as a regulator.' The move completed a round-trip for Kroeker; he had been a partner at Deloitte before joining the SEC in 2007," according to POGO.
When the chief executive nominated White, the POGO report noted, he said "'you don't want to mess with Mary Jo,' ... referring to her work from 1993 to 2002 as the U.S. Attorney for the Southern District of New York, where she 'built a career the Hardy Boys could only dream of' prosecuting white-collar criminals."
What Obama didn't say was anything about the fact that at the law firm where she worked for more than a decade, "she has routinely defended clients before the SEC. For instance, she defended JPMorgan when the SEC charged the company with misleading mortgage investors, according to The Washington Post" and "in a separate matter, Morgan Stanley's board hired White to explore if a prospective CEO was in danger of being charged in an SEC insider trading probe."
A subsequent Senate review of "how the SEC handled White's inquiries, Senate investigators criticized the agency for 'providing prominent individuals selective access to senior SEC officials.'" POGO said.
Go here for the complete POGO SEC revolving door report.