Congress has voted to repeal of a provision in the financial reform bill that would have eliminated transparency for the government’s perenially troubled financial watchdog, the Securities and Exchange Commission (SEC). The bill got unanimous approval in the Senate. President Obama has not yet spoken about whether he will sign the bill.
The Dodd-Frank Wall Street Reform and Consumer Protection Act contained a provision that allowed the Securities and Exchange Commission (SEC) to not “disclose records or information” that are typically subjects of Freedom of Information Act (FOIA) requests. The ranking Republican on the House Oversight and Government Reform committee, California Rep. Darrell Issa, just released a report yesterday that emphasized the need to maintain oversight of the SEC:
Despite a budget that nearly tripled between 2000 and 2010, the SEC has not lived up to its watchdog responsibilities. The scandals involving Bernie Madoff, Enron, WorldCom, and others during the past decade were not detected by SEC investigators but by journalists, whistleblowers and others. In many cases the SEC had the information it needed to frauds years earlier but failed to put the pieces together until after the wrongdoing had already been uncovered. Oversight Committee Republicans launched an investigation of problems at the SEC and released a report finding that the SEC suffers from an acute “silo problem,” which has been admitted by former Chairmen, current and former commissioners, senior staff, and the SEC Inspector General. The Commission is divided into five operating divisions and sixteen independent offices – all but three reporting directly to the Chairman. The Commission’s fragmentation into operational silos has devastating effects on collaboration, encourages uninformed rulemaking, prevents effective IT investment, and generates bureaucratic rivalries. The Dodd-Frank financial services legislation did not address these problems and there is a clear need for oversight that should present an opportunity for needed reforms and restructuring.”
If Obama meant anything about wanting greater transparency in government, this is just the bill for him to sign.