A long-running feud between a leading critic of the finance industry in the Senate and the head of the Securities and Exchange Commission reached a new peak Friday, when Sen. Elizabeth Warren (D-Mass.) asked President Obama to replace SEC chair Mary Jo White.
In a letter to Obama, Warren calls White the “biggest barrier” to progress on a push to force corporations to disclose their political spending, and she says that White “has refused to develop a political spending disclosure rule despite her clear authority to do so.”
“Enough is enough,” Warren writes to Obama, adding: “I respectfully urge you to exercise your unilateral authority under (federal law) to immediately designate another SEC commissioner as Chair of the agency.”
Later, she adds: “While demoting an existing Chair and selecting another from among the agency's current Commissioners would be an uncommon act, Chair White's extraordinary, ongoing efforts to undermine the agency's central mission make such a step necessary.”
The SEC declined to comment on the letter. When Warren criticized White last year, White House press secretary Josh Earnest said, "The president continues to believe that the reason that he chose her, based on her experience and her values, continue to be important today."
Warren has been battling White for years, but the letter is by far her most direct attack on White — and an indication of why Warren carries so much weight on Wall Street.
The two have clashed repeatedly. In January, Warren issued a report arguing that U.S. companies get away with crimes that regular people don’t because of weak enforcement. The SEC “is particularly feeble, often failing to use the full range of its enforcement toolbox,” the report said.
In June, Warren and White faced off during a Senate Banking Committee hearing.
“A year ago I called your leadership at the SEC extremely disappointing,” Warren said. “Today I am more disappointed than ever.”
White quipped: “I’m disappointed in your disappointment.”
This time the clash is over whether publicly traded companies should be required to disclose their political donations.
Investors groups argue that such companies should not be allowed to spend shareholders’ money on political campaigns without disclosing it. The data would shed a light on the companies' political connections, they say.
But business groups and Republicans say a company's political contributions are not related to its financial performance and that the disclosures are unnecessary.
The SEC received a record number of public comments on the topic, more than 1 million, but did not act. It dropped the issue from its priority list in 2013.
In 2013, Obama appointed White, a former federal prosecutor, to rebuild the reputation of the SEC, which had long suffered under the popular notion that it was a slow and toothless tiger. But in the years since, the SEC has been swallowed by the task of implementing dozens of rules called for under the 2010 Dodd-Frank financial reform law and the 2012 JOBS Act, which aims to make it easier for small businesses to raise money.
The 4,000-person agency has tussled constantly with Congress, while scrambling to keep up with the technological changes that have overtaken Wall Street.