SEC Lacking Leadership, Critics Charge

At a time when Wall Street faces its biggest challenge in years, the stock market’s top cop--the Securities and Exchange Commission--is hamstrung by a leadership vacuum, critics say.

Two commissioners’ seats at the five-member SEC are vacant, while two others are only temporarily filled.

Meanwhile, lawmakers from both parties have been calling for the resignation of Harvey L. Pitt, named SEC chairman by President Bush last summer.

Legal experts said it was urgent that the SEC’s leadership gaps be filled to bolster the agency’s credibility.

“It is ... bizarre that the other four commissioners for the SEC have not been confirmed,” said Joel Seligman, dean of the Washington University School of Law in St. Louis, Mo., and an expert on securities law.

Cynthia Glassman, a recent Republican nominee, is serving on the SEC under a temporary recess appointment, awaiting Senate review. Isaac Hunt, a Democratic holdover from the previous administration, also has a recess appointment, but is not expected to be renominated as a commissioner. Republican nominee and former accounting firm executive Paul Atkins has been nominated but not yet confirmed.

In April, Bush nominated two Democrats: Harvey Goldschmid, law professor at Columbia University in New York and former SEC general counsel; and Roel Campos, a lawyer and communications industry executive in Houston who was an assistant U.S. attorney in Los Angeles.

Neither Goldschmid nor Campos has been confirmed by the Senate. The Goldschmid nomination has been sent from the White House to the Senate Banking Committee for consideration, but the Campos nomination has not, sources said.

The delays leave the controversial Pitt as the only officially confirmed member of the commission.

Questioned about the delays, Capitol Hill and Bush administration aides said such holdups were not unusual. Asked about the Campos nomination, a White House spokeswoman said, “He’s going through the process.”

A spokeswoman for Senate Majority Leader Tom Daschle (D-S.D.) said, “We expect that he’ll be nominated.” Campos couldn’t be reached for comment.

Last week, a judge dismissed an SEC action against accounting firm Ernst & Young, finding procedural error in the fact that only one commissioner could vote to approve the action, with two commissioners having recused themselves and two seats empty.

“As we saw with the Ernst & Young business, when you only have a small number of commissioners ... that in itself is a problem. But it’s a bigger problem now with an embattled Pitt and the legitimacy of the whole agency under some assault,” said Norman Ornstein, political analyst at the American Enterprise Institute, a policy study group.

Lawmakers have said in recent days that Pitt should resign, accusing him of being too close to the businesses he regulates.