Key Senator Backs SEC’s $841.5-Million Budget
The Securities and Exchange Commission’s proposed record $841.5-million budget won the support Tuesday of the chairman of the Senate Appropriations subcommittee that oversees the regulatory agency’s spending.
“The check is in the mail,” Sen. Judd Gregg (R-N.H.), chairman of the subcommittee, told SEC Chairman William Donaldson, who defended the agency’s request in testimony Tuesday.
The SEC is seeking an 18% increase in spending for fiscal 2004, which starts Oct. 1, to expand its staff for handling more than 2,200 investigations, including accounting fraud cases at Enron Corp., WorldCom Inc. and HealthSouth Corp. Donaldson said the extra money would help the SEC restore investor confidence in U.S. stock markets.
By adding about 800 employees, the SEC would “evolve into a much more efficient force, becoming quicker, more agile and more proactive,” Donaldson said.
Key lawmakers in the House also have endorsed the SEC’s budget request for fiscal 2004. This fiscal year’s budget is $716 million.
“Whatever you need, you’re going to get,” Rep. Frank R. Wolf (R-Va.), chairman of the House Appropriations subcommittee, told Donaldson at a hearing on the SEC’s budget last month.
Sen. Ernest F. Hollings (D-S.C.) questioned Donaldson Tuesday about progress in the probe of Enron and its former chairman, Kenneth L. Lay, a leading campaign contributor to President Bush.
A year and a half has passed since revelations about Enron’s accounting schemes, and “all of a sudden, the case disappears,” Hollings said.
Donaldson said the SEC is “on the case,” working with other agencies in conducting a careful investigation. Hollings said Donaldson’s assurance was “sufficient for me.”
The SEC chairman also said the commission’s search for a new chairman of the Public Company Accounting Oversight Board is in “advanced stages” after the SEC “reached out in a broad and public way to add to our list” of candidates.
“We don’t want to make a mistake on this,” Donaldson said.
On possible SEC regulation of hedge funds, Donaldson told the senators the SEC will hold a round-table in May soliciting comments from hedge-fund executives about their industry.
Lawmakers say they are concerned that hedge funds, which are largely unregulated and once were sold only to wealthy and sophisticated investors, are being marketed to more mainstream customers unaware of the risks.
Gregg said the Senate may wrap into the SEC’s appropriations bill a measure to let the SEC speed the hiring of accountants and economists for its investigative teams. The House Financial Services Committee last month approved such a bill.
The SEC says its new hires in the next several months will include 188 staffers for the agency’s enforcement unit, 204 for its disclosure division and 201 for its market regulation unit.
