President Obama recently nominated Mary Jo White to serve as the next Chair of the Securities and Exchange Commission. As Chair, White would oversee the entity that is responsible for protecting the investing public from unscrupulous and criminal behavior among investment companies, banks and corporations.
White is a well respected attorney. She was the United States Attorney for the Southern District of New York (one of the most prestigious prosecutorial offices in the nation) from 1993 to 2002. White earned a reputation as a tough but fair prosecutor. Her most famous cases include the successful prosecution of terrorists who bombed the World Trade Center in 1993.
Despite her outstanding reputation as an attorney, White has received early criticism from some progressives who think she would do a terrible job as the SEC Chair. White's critics contend that because she has worked as a white-collar criminal defense attorney, including serving as counsel for large banking clients, she would not strongly enforce securities regulations. Instead, her critics argue that she will protect financial institutions to the detriment of the investing public.
David Sirota: Mary Jo White Is A "Wall Street Enabler"
Progressive blogger David Sirota wrote a forceful critique of White's nomination for Salon. Sirota's article bears the title "Wall Street's New Enabler." From the start, Sirota makes it clear that he is angry with the nomination. Sirota makes the case against White primarily by focusing on her life after she left her position as a federal prosecutor. The fact that White worked as a defense lawyer for banking institutions and defended those clients against actual and potential criminal investigations presumably makes her unfit to chair the SEC.
By his own admission, Sirota was only vaguely familiar with White when he first heard of the nomination. Nonetheless, with the help of Google, Sirota remembered why she was a poor choice:
Her name should ring a bell, or really, sound a frightening alarm. I knew I had heard of her before, and not in a good way. So I fired up Google this morning and sure enough, I discovered why my superficially good feeling was quickly turning into a deeply ominous nausea. I suddenly remembered that this is the same Mary Jo White who has built the latter part of her career leveraging her position in governmental law enforcement positions to land lucrative private-sector jobs defending Wall Streeters. In moving through that revolving door, she has been a part of a corrupt culture that has weakened the power of the very law enforcement agency President Obama is now nominating her to run (italics added).These are very strong words -- especially given Sirota's admitted lack of familiarity with White. Based on a simple Google search, Sirota now firmly believes that White is enmeshed in an unspecified but very dangerous culture of corporate corruption.
Sirota also relies upon Rolling Stone reporter Matt Taibbi to support his condemnation of White. Taibbi has criticized the banking industry in written articles and during media appearances. He has also argued that the Obama administration is in-bed with the financial sector, due, in part, to a revolving door of employees between government and private firms.
In an article titled, "Why Wall Street Isn't in Jail," Taibbi discusses a 2010 conference attended by private and governmental sector employees. Gary Aguirre, a former SEC investigator and whistleblower, attended the conference and provided details to Taibbi.
Mary Jo White, who was now a partner at Debevoise and Plimpton, a prestigious international law firm with many financial sector clients, also attended the conference. At some point during the conference, White provided an introduction for Preet Bahara, then the United States Attorney for the Southern District of New York (White's former position). As a New York City federal prosecutor, Bahara would have jurisdiction over securities-related crimes committed by Wall Street firms.
When Bahara rose to speak, he responded cordially and directed some comments to White: "I want to first say how pleased I am to be here. . . .You've (White) spawned all of us. It's almost 11 years ago to the day that Mary Jo White called me and asked me if I would become an assistant U.S. attorney. So thank you, Dr. Frankenstein." According to Taibbi, this exchange demonstrates the "chumminess and mutual admiration" among the regulators and the regulated. Sirota agrees with this assessment and concludes that White is too close to Wall Street to protect investors.
Having attended dozens of typically boring legal professional conferences, the banter Taibbi describes as damning sounds more like the amateur comedic one-liners that gray-haired attorneys inexplicably deliver as the opening salvo to dry dissertations. These folks are not late-night comedy material.
Sirota relies on Taibbi's article for another presumably damning story regarding White. Aguirre (the SEC whistleblower) says he received heat and was subsequently fired because he wanted to investigate former Morgan Stanley CEO John Mack for insider trading. According to Aguirre, White talked with the chief investigator for the SEC, who instructed him to discontinue the investigation. Although both Taibbi and Sirota portray this as an example of corruption, it is unclear what, if anything, White did to influence the discharge of Aguirre and the refusal to investigate Mack.
While Taibbi says that Aguirre only wanted to "interview" Mack, every lawyer knows that investigative interviews are not simple chats. They are made in connection with potential prosecution. Conducting such an investigation with a heavily lawyered target would constitute a waste of resource, unless the government has a clear basis to believe that wrongdoing has occurred. Regardless of what actually transpired, Sirota's portrayal of White as a corrupt lawyer does not rest on any full knowledge he has regarding this situation.
I worked as an attorney in New York City during the early part of White's career as a prosecutor. Based on my knowledge of her and the assessment of other lawyers, I believe that she would make a good SEC Chair. I express this opinion, however, hoping to find out more information about White's ties to Wall Street, whether these connections would prevent her from performing her obligations as chair, and the ways she would use her position to root out illegal banking practices and to protect the investing public.
As a progressive, I believe that White deserves the dignity of open discourse. Progressives should not reach rash decisions, based on vague memories, quick Google searches, and information supplied by one journalistic source. The Left often criticizes the Right for behaving in this fashion. Factless arguments are just as disturbing when they come from the Left.
Sirota Unfairly Attacked Me
I posted a 2-paragraph response to Sirota on his Facebook page and a few short responses on Twitter. Although these messages are not as detailed as this blog post, they basically convey the same points: that Sirota has rushed to judgment and is especially wrong to raise White's defense work as a strike against her. Sirota went ballistic, responding with an onslaught of angry, desperate Tweets.
Sirota described my posts as a "slanderous lie"; a "deliberate malicious lie"; he urged me to "get a life -- and some legal training." I informed him that I was a law professor (who, by the way, graduated from Yale Law School 19 years ago). He said I am "willfully ignorant." Finally, in two separate posts, Sirota said "fuck you." Since that time he has deleted the "fuck you" posts. Sirota's charged responses cannot cover his empty analysis. Note: A screen capture of Sirota's posts appears below this post; my Twitter page can be found at this link.