The chairman of the Securities and Exchange Commission told a congressional hearing yesterday that he is studying -- but has not agreed to -- a request by Vice President George Bush to submit proposed regulations to the Office of Management and Budget before they are adopted.
Responding to pointed reminders by House subcommittee members of the SEC's independence, Chairman John S. R. Shad hedged on whether he would run SEC regulations through the administration clearinghouse.
Opponents of the procedure fear it could be used to delay or influence agency initiatives that the administration didn't like, even though submission of regulations by independent agencies would be "voluntary."
Rep. Timothy E. Wirth (D-Colo.), indicated that he and Rep. John D. Dingell (D-Mich.), chairman of the House Committee on Energy and Commerce, believed that the SEC had decided to steer clear of the regulation review process, based on Shad's remarks in a private meeting earlier this month. But Shad yesterday was more equivocal.
Besides registering his own concerns about the SEC's independence, Wirth reminded Shad of an earlier letter from Dingell.
"We do not object to your agency cooperating with the President and the executive branch," Dingell wrote, but he warned Shad to "ensure that your agency's independent status is carefully observed and to ensure that the Executive branch does not unduly delay or influence any actions or decisions that your agency plans to take."
"We are concerned that the OMB clearance procedure could be used to effectively abolish independent agencies by interfering with their legislative functions," Dingell wrote.
Wirth raised the issue of independence again in a discussion of possible successors to the SEC's director of enforcement, Stanley Sporkin. Sporkin, who led the enforcement division through an era of major prosecutions, left earlier this spring to become general counsel to the Central Intelligence Agency.
"We hear rumors that there is a lot of pressure on the SEC to appoint someone from the outside" who might not be as tough, Wirth said. Shad, who indicated he would fill the job by the end of July, said he is unaware of any pressure and is meeting with candidates from inside and outside the agency.
Possible successors to Sporkin include Peter R. Taft, a partner in the Los Angeles law firm Munger, Tolles & Rickershauser; John M. Fedders of Arnold & Porter, and Jed S. Rakoff, a partner in the New York law firm Mudge Rose Guthrie & Alexander.