Alliance Voices Skepticism Over SEC Nominee Cox

An alliance of consumer advocates urged Congress on Monday to scrutinize what they termed the “anti-investor record” of Rep. Christopher Cox (R-Newport Beach) before he is confirmed to serve as chairman of the Securities and Exchange Commission.

Cox, nominated by President Bush to head the agency that is a watchdog over corporate America, Wall Street and average investors’ savings, will answer questions today before the Senate Banking Committee. The committee could vote on Cox, along with two Democratic nominees who enjoy support among Senate Democrats, as early as Thursday.

At a news conference Monday, a coalition of critics, including Public Citizen, the AFL-CIO and shareholder activists, expressed concern that Cox was cruising toward rubber-stamp approval. The group assailed his voting record and questioned his qualifications for the SEC post.

Cox’s “record is atrocious from an investor’s point of view,” asserted Joan Claybrook, president of Public Citizen. “He at least deserves a public scrubbing in the nomination process.”

In an analysis of Cox’s 17-year voting record in the House, Public Citizen said that on major bills dealing with corporate and accounting reform, investor legal rights and protection of retirement investments, Cox chose the shareholder-advocate position once out of 22 votes.

“We are deeply troubled by Representative Cox’s congressional record, where he has sided with large corporate interests over investors’ concerns routinely,” said Anna Burger, secretary-treasurer of the Service Employees International Union, in a letter to members of the Senate committee.

Cox, 52, has declined to address his record ahead of his confirmation hearing. But he has hinted that he does not plan to roll back the corporate and market reforms of William H. Donaldson, who resigned as SEC chairman in June. Donaldson was hounded by business lobbyists who said he had become an overzealous regulator.

A White House spokeswoman Monday said that Cox, who was a securities lawyer before becoming a congressman, would bring “a tremendous amount of experience” from the private sector and Congress to the SEC job. “He’s someone who understands securities law and will make an outstanding chairman,” said the spokeswoman, Erin Healy.

The consumer coalition contended that Cox had sponsored relatively few securities-related bills in the House, despite what they said was the popular perception of his experience.

During nine terms in Congress, Cox has been a primary sponsor of 178 bills, the group said. Of those, four involved securities issues, it said.

Cox has been vilified by shareholder advocates since he championed a 1995 law that raised the hurdles for investor lawsuits against companies. Cox said the goal was to stop frivolous suits.

More recently, he has drawn criticism for siding with the technology industry in opposing a new accounting rule requiring that companies treat stock options as a formal expense.

Shareholder activists also have objected to Cox’s votes on measures involving the SEC’s power to seize illegal profits from corporations, and on measures addressing conflicts of interest among stock analysts, board members and auditors.

While some labor groups on Monday rejected Cox, the AFL-CIO stopped short, although it still expressed doubts about his record.

Damon A. Silvers, associate general counsel of the AFL-CIO, said that the role of SEC chairman would be very different from Cox’s role as a soldier in the House leadership, and expressed hope that Cox would take a broader view of his responsibilities to the public.

“If Rep. Cox can show in the hearing that he understands that difference that’s a whole different story than looking just at that voting record,” Silvers said.

Despite the issues raised Monday, some members of the coalition said Cox’s confirmation hearing was unlikely to be heated -- in part because the White House accepted the suggestions of Senate Democrats to nominate Roel C. Campos, an incumbent SEC commissioner, and Annette Nazareth, a senior SEC official, for two other spots on the five-member panel.