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Senate Banking Postpones Vote on SEC Commissioners as Democrats Demur

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Confirmation of the two new SEC Commissioners, Hester Peirce and Lisa Fairfax, will be on a hold a bit longer.

A vote on the two women to fill the two open SEC commissioner spots was derailed Thursday when four democratic members of the Senate Banking Committee cast no votes.

Senate Banking Committee Chairman Richard Shelby, R-Ala., then postponed the committee vote on the two SEC nominations. “We’ll postpone the vote; there’s a little confusion here,” Shelby said.

Sen. Chuck Schumer, D-N.Y., said that he was voting no because he had “not received answers sufficient from either of the nominees to the SEC on the question of the SEC’s rulemaking on the disclosure of corporate political spending.”

The answers he received in writing from Fairfax and Peirce, Schumer said, was “frankly gobbledygook; maybe yes, maybe no. I have to look at both sides.”

Such a rulemaking “should be a priority of the SEC,” Schumer continued, as the Supreme Court’s 2010 Citizens United decision “opened the floodgates for a deluge of dark money into the political system — undisclosed, anonymous, unaccountable.”

The proposed SEC rule “would at least compel corporations to disclose if and where they are making political donations. It would introduce a small but undeniably important degree of accountability into a system that’s broken.”

Schumer noted the 1.2 million public commenters who urged the SEC to move ahead on the rule.

The three other dissenters on Peirce and Fairfax’s confirmation for failure to specifically support a political corporate spending rule by the SEC were Sen. Bob Menendez, D-N.J., Sen. John Merkley, D-Ore. and Sen. Elizabeth Warren, D-Mass.

Menendez said he planned to meet with both Peirce and Fairfax in “the coming weeks” to discuss their positions on the rulemaking.

Merkley noted his disappointment that SEC Chairwoman Mary Jo White took consideration of the SEC’s political corporate spending rule off the agency’s agenda.

Both Peirce and Fairfax, Merkley continued, have “not clarified that they understand and will advocate for the transparency that our Constitution requires.”

Warren added that she shared concerns on the political spending issue, noting that “what has happened to the campaign finance system in this country is a disgrace.”

The SEC, she continues, has the “authority to help, what it doesn’t have is the will. This is wrong.”

Warren said that she also has “serious concerns” about Peirce’s nomination based on her views about the Dodd-Frank Act.

Said Warren: “It’s dangerous to put anyone in an SEC commissioner position, someone who will have to implement and enforce the law, who seems to be so adamantly opposed to the financial reforms that Congress put in place after the 2008 financial crisis.”

Peirce, currently a fellow for the Mercatus Center at George Mason University, would replace SEC Commissioner Daniel Gallagher, a Republican, who left his post on Oct. 2; Gallagher’s term was to expire this year. 

Peirce has also served as a lawyer for the Senate Banking Committee.

George Washington University law professor Fairfax replaces Luis Aguilar, a Democrat, who left the agency on Dec. 1. Fairfax is the Leroy Sorenson Merrifield Research Professor of Law at the George Washington University Law School. Prior to joining the GW law faculty, she was a professor of law and director of the Business Law Program at the University of Maryland School of Law.

Both Peirce and Fairfax voiced concerns about the Department of Labor’s fiduciary rulemaking at their March 15 Senate Banking Committee nomination hearing.