Head to Head On the Hill

New Finance Chairman, SEC Chief Are a Study in Contrast

From their years at Harvard Law School to their tenure in the House of Representatives, Barney Frank and Christopher Cox chose markedly different approaches to reach their destinations.

This week, their paths will cross again as Frank, a Massachusetts Democrat, assumes control of the House Financial Services Committee, which oversees the Securities and Exchange Commission -- led by Cox, a former Republican lawmaker from California.

Despite similar r?sum?s, the men could hardly be more divergent in ideology and personal style.

Frank, who used an anti-neatness slogan in his first federal campaign 27 years ago, has a lacerating wit. His support for predatory-lending reforms, minimum-wage increases and universal health care mark him as one of the most left-leaning lawmakers on Capitol Hill.

Cox rarely appears in public with a hair out of place or a wrinkle in his perfectly tailored suits. He speaks with deliberation and labors to defuse criticism. Cox cut his teeth in the Reagan White House, and his votes in Congress earned him an 87 percent lifetime rating from the U.S. Chamber of Commerce before he became chairman of the Securities and Exchange Commission.

Already, they have clashed over a change to an SEC rule that some investor advocates say will reduce disclosure of executive pay in the form of certain stock awards. The change, announced in a press release three days before Christmas, amounted to a gift to the business lobby, Frank told reporters last week. "I didn't even know they had a chimney at the SEC," Frank joked, true to form.

Equally in character, Cox called Frank to smooth things over, explaining the timing of the move and defending his approach as logical, since, he said, the initial plan would have forced companies to report pay that corporate officials might never have collected.

The damage-control effort appears to have worked, for now. In a follow-up interview, Frank praised the SEC leader for his "responsible" approach at the helm and predicted few sharp disagreements to come. "There are going to be cases where I'll believe we should go further than he," said Frank, who advocates more disclosure to investors .

Frank plans to present his agenda -- what he calls "the grand bargain" -- at the National Press Club today. He will urge lawmakers to offer business concessions on trade and some burdensome regulations in exchange for more housing for the poor and minimum-wage gains.

For years, Frank has focused on housing and income inequality, just as Cox has championed making it easier for companies to win access to capital markets. But while holding fast to those priorities, neither has been reluctant to entertain opposing views.

To date, Cox has pursued a far less ideological agenda at the SEC than governance analysts expected -- and Frank's record reflects a more business-friendly stance than many have assumed. Both men voted in favor of a 1995 law that imposed limits on the filing of class-action securities lawsuits. While in Congress, both reaped significant campaign contributions from banks, insurers, and law and accounting firms. And both have said they turn first to the markets for solutions to economic problems, rather than to government.

Frank, for instance, said he agrees with certain conclusions reached late last year by an independent panel with support from Treasury Secretary Henry M. Paulson Jr., including making it more difficult for prosecutors to indict businesses. He also supported tweaks to a costly audit rule springing from the 2002 Sarbanes-Oxley law, as long as the intent of the corporate accountability legislation was not thwarted.