Finance

Warren to Obama: Fire your SEC chief

Sen. Elizabeth Warren (D-Mass.) took the remarkable step Friday of calling on President Obama to remove one of his top financial regulators immediately.

In a letter sent to the president, Warren made the case that Mary Jo White, Obama’s hand-picked head of the Securities and Exchange Commission, had engaged in “extraordinary, ongoing efforts to undermine the agency’s central mission.”

{mosads}The letter marks the climax of a steadily building feud between Warren and White over Wall Street, leaving one of the Senate’s loudest voices opposing Wall Street publicly undercutting one of the administration’s top Wall Street watchdogs.

“I do not make this request lightly. 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 completing those rules that Congress has required it to implement,” wrote Warren. “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.”

Warren called on Obama to immediately remove White as the SEC’s chair and replace her with another one of the two current SEC commissioners. Such a move could happen quickly and would not require Senate confirmation.

Such a dramatic change at the top of Obama’s administration seems unlikely in the final months of his time in office. But Warren’s letter is also a clear indication that the liberal wing of the party is intensely interested in who is steering top regulators and what sort of job they are doing, weeks before voters pick a new president.

In the 12-page letter, Warren made the argument that White had regularly ignored the will of Congress and the administration and instead had pushed initiatives favorable to corporations with little benefit to the public.

Warren’s primary complaint, and one shared by other Democrats, is White’s refusal to begin work on a rule that would require corporations to disclose their political spending activities. Such a contentious initiative has been sought by Democrats ever since the Supreme Court’s ruling in Citizens United v. Federal Election Commission, which opened the doors to a huge increase in political spending by outside organizations.

The SEC has not made headway on that rule under White and in fact has removed it from its regulatory agenda altogether. Republicans in Congress have included riders in the last two spending bills barring the use of funds to write such a rule, but Warren argued that project is never going to move forward under White’s “brazen conduct.”

White’s refusal to take on a political spending rule has infuriated Warren and other key Democrats, including Sen. Charles Schumer (N.Y.), who is expected to serve as the Senate’s top Democrat in 2017.

While policy riders have limited the SEC’s ability to work on such a rule, Democrats are incensed that the SEC is not even taking apparent steps to prepare to act on the rule if a future funding bill drops that provision.

Warren also re-aired a lingering grudge with White’s push to potentially simplify corporate disclosures, calling it a “far-reaching, time-intensive, anti-disclosure initiative cooked up by big business lobbyists.”

White had previously suggested that investors may be suffering from “information overload” when it comes to corporate disclosures and launched an initiative to explore if there is a way to streamline the process. But Warren and others on the left have cried foul over the project, arguing it would let corporations give the public less information.

Warren also aired grievances about the SEC’s delays over implementing some lingering rules from the Dodd-Frank financial reform law, which was passed back in 2010.

White, a former federal prosecutor and white-collar lawyer, was unanimously confirmed by the Senate back in 2013. Among the senators supporting her nomination was Warren.

But since then, the two have fallen into an increasingly acrimonious relationship, coming to a head Friday with Warren’s call for White to effectively be fired from her post.

However, it is not clear how Warren’s message will be received in the White House. After a previous critique of White by Warren back in June 2015, White House press secretary Josh Earnest threw Obama’s support behind the SEC chief.

“The president does continue to believe that she is the right person for the job,” he said at the time. A White House spokesperson did not immediately respond to a request for comment Friday.

And with just months remaining in Obama’s time in office, there is little expectations of any major staff shakeups in the closing stretch.

Warren did not specify who should replace White at the top of the SEC, but it’s likely she would want to see Kara Stein, the other Democratic commissioner who is seen as less friendly to the financial sector, as her successor. The SEC is currently short-staffed, as the Senate has stalled on two nominees to join the SEC as commissioners. That means that if White were removed, that would leave just Stein or Michael Piwowar, a Republican, to take the reins.

“Enough is enough,” wrote Warren.

The SEC declined to comment.

This post updated at 9:13 a.m.

Tags Charles Schumer Dodd–Frank Wall Street Reform and Consumer Protection Act Elizabeth Warren Elizabeth Warren Mary Jo White U.S. Securities and Exchange Commission

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