In a scathing letter to President Obama, Sen. Elizabeth Warren urged the outgoing president to immediately remove Mary Jo White as chairwoman of the Securities and Exchange Commission. Due to White’s anti-disclosure agenda and repeated failure to impose federal mandates, Sen. Warren called for White’s replacement on Friday to prevent the SEC chairwoman from causing further damage to investors and the public.
“Corporations are flooding our elections with millions of dollars in secret political contributions, drowning out the voices of working families,” Warren wrote in her letter to President Obama. “Yet two weeks ago, Republican leaders successfully forced a rider into must-pass legislation to fund our government that prohibited the Securities and Exchange Commission (SEC) from issuing a final rule requiring public companies to disclose these political contributions.”
The Supreme Court’s Citizens United decision in 2010 opened the floodgates allowing dark money to influence U.S. elections without disclosing the identities of the donors. As Democrats fight to repeal Citizens United and the newly drafted rider, Warren accused the SEC chair of dereliction of duty while actively supporting an utter lack of transparency.
“Transparency helps investors separate desirable investments from undesirable ones and evaluate business activities objectively, thus allowing them to allocate their capital more efficiently,” Warren continued. “By contrast, reducing requirements for public companies to disclose information material to investment decisions undermines efficient markets, encourages fraud, and, in extreme cases, can sow the seeds of future economic meltdowns.
“Chair White’s comprehensive anti-disclosure agenda runs directly contrary to the SEC’s purpose. It hurts investors, undermines Administration policy, and willfully misinterprets congressional mandates. You have the authority to designate a new SEC Chair, and I believe Chair White’s anti-disclosure efforts give you ample reason to do so.”
After receiving a petition in 2011 that garnered massive public support for companies to disclose their secret political contributions, then-SEC Chair Mary Shapiro announced the agency would begin work on a political spending disclosure rule by April 2013. But according to Warren, the project was abandoned immediately after White took office in April 2013.
“In the wake of the greatest economic meltdown since the Great Depression, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, in part, to address inadequate investor understanding of company behavior,” Warren asserted. “The Act required the SEC to develop several rules to this end. Chair White, however, appears to view these congressional mandates as mere suggestions that the agency is free to ignore. And she has gone further – publicly denigrating some of these requirements as superfluous and misguided.”
Warren accused the SEC of failing to finalize 19 mandatory rules under the Dodd-Frank Act while ignoring the agency’s core mission of investor protection under White’s detrimental watch.
“I do not make this request lightly,” Warren wrote in closing. “I have tried both publicly and privately to persuade Chair White to direct the agency’s resources toward pressing matters of compelling interest to investors and the public, and toward compelling those rules that Congress has required it to implement. But after years of fruitless efforts, it is clear that Chair White is set on her course. The only way to return the SEC to its intended purpose is to change its leadership.”
Although neither presidential candidate will likely keep White on as SEC Chair after the election, Warren has asserted that the country cannot abide another month with White in office. On Friday, Warren took to Twitter and wrote, “The SEC needs new leadership to return to its mission to protect investors. @POTUS should use his authority to designate a new chair today.”