Congressman Cox to Replace Donaldson at SEC

William Donaldson announced is resignation as head of the Securities and Exchange Commission, and President Bush, whose administration is littered with unfilled jobs and “acting” bureaucrats, proved he can move quickly when need be. He appointed Congressman Christopher Cox (R-CA) to fill the spot. Senate confirmation is required, and the filibuster is a potential tool to halt the nomination, but this is an appointment the Democrats would be better off nodding through the Senate.

Mr. Donaldson has been chairman of the SEC for about two and a half years, and is cordially hated in many boardrooms for his work in cleaning up the Enron-style abuses of Wall Street. Although Messrs. Sarbanes and Oxley rammed through the new rules which actually give shareholders some rights over their capital, it was Mr. Donaldson who was blamed for the greater obligations to be transparent. He quit to return to his family, so clearly he was quitting for political reasons. He had come to the end of his rope with some of his fellow commissioners.

Congressman Cox is an Orange County Republican, which puts him quite a way to the right. But the term “right” is rapidly becoming meaningless in Republican Party politics. A better description of him is “corporatist.” He backs the abolition of taxes on dividends, capital gains taxes on savings and investment and the estate tax. He has also drafted legislation raising the bar on investor-initiated lawsuits.

For some, this would be reason enough to oppose his nomination. However, that is taking a short-term view. As a graduate of Harvard Law and Business Schools, it is pretty safe to say he is intellectually up to the job (although to be fair Mr. Bush is a Harvard Business grad, and so the value of that degree is certainly questionable). Moreover, he has ties to Capitol Hill which give him the political network needed to ensure he can keep the SEC functioning. After 18 years in Congress, and White House experience as a Reagan administration advisor, he's qualified and more.

Sarbanes-Oxley is cumbersome, and for some small companies, compliance is excessively expensive. Many accounting firms are confused as to what must be done under the law, and some senior managers still think they are above the law entirely. If Mr. Cox focuses on streamlining the application of the law and not its repeal, he may be quite successful and the country better off for having him at the SEC.


© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.
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