Senate Confirms Donaldson as SEC Chief
Friday February 14, 12:15 am ET
By Susan Cornwell
WASHINGTON (Reuters) - The U.S. Senate on Thursday confirmed investment banker William Donaldson (News) as chairman of the market-regulating Securities and Exchange Commission (News - Websites). He could be sworn in and on the job by next week.
Donaldson, 71, was nominated by President Bush to replace securities attorney Harvey Pitt, who offered his resignation in November after he mishandled the creation of a new body to police the accounting industry.
The Senate confirmed Donaldson on a voice vote late on Thursday evening, two days after he had been approved by the Senate Banking Committee.
Donaldson had been expected to gain full Senate approval on Wednesday. But action was delayed a day after one Democratic senator, Tom Harkin of Iowa, threatened to block the vote over an unrelated farm bill issue, congressional aides said.
Harkin "wasn't opposed to Donaldson. He was just upset about his bill," Sen. Harry Reid of Nevada, the assistant Democratic leader, said just before the vote.
Harkin complained earlier on Thursday that a spending bill had slashed the Conservation Security Program. He extracted a pledge from Republican leaders that they would address the issue in the near future, congressional aides said.
Reid told reporters lawmakers had decided they should go ahead and confirm Donaldson "because we want Pitt out of there."
A former New York Stock Exchange (News - Websites) chief and ex-Marine, Donaldson has said his first priority will be to select a new head of the Public Company Accounting Oversight Board.
Bush, in a statement, applauded the Senate for moving swiftly to confirm Donaldson.
"In this new role, he will continue to crack down on corporate wrongdoing, work to protect investors and restore confidence in our capital markets," Bush said.
Donaldson co-founded the investment bank Donaldson Lufkin & Jenrette. Until 1973, he was its chairman and chief executive. From 1991 to 1995, he chaired the New York Stock Exchange.
Pitt has continued working for the last three months pending the arrival of his replacement.
Donaldson's first challenges will also include finalizing a $1.4-billion settlement with Wall Street's largest brokerages involving multiple probes into stock research.
Federal and state officials have been circulating drafts of the final terms of the settlement and the SEC is expected to consider new rules for research analysts.
The Sarbanes-Oxley law -- passed last year amid scandals at Enron Corp. (Other OTC:ENRNQ.PK - News), WorldCom Inc. (Other OTC:WCOEQ.PK - News) and elsewhere -- ordered adoption of rules for analysts by July 30 requiring more disclosure of potential conflicts of interest and clearer separation from investment bankers inside brokerages.
President Bush has sent Congress a budget for the 2004 federal fiscal year starting Oct. 1 that includes $841.5 million in SEC spending, almost double the fiscal 2002 level.
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