Did Bush's SEC Willfully Blow Enforcement?

George Bush's SEC sounds more hinky by the minute. Every day we hear about another massive Ponzi scheme, illegal trading or dodgy manuever. Bernie Madoff lead-offs the list but if you're like me you've had trouble keeping track.

So I skimmed SEC's website. I found Billion Coupons, Locke Capital, Diversified Lending/Applied Equities, Sunwest Management, North Hills, UBS/Blackstone, Elucido Fund, ProTrust, Scoop Capital/Scoop Management, CRE Capital, Joe Forte, Stanford Financial Group. There was a $40 million Ponzi scheme reported just yesterday. Earlier this month 14 top Wall Street "specialist firms" were popped for "unlawful proprietary trading" to the tune of $70 million. That's this year alone!

So far we discover these crooks when they run out of money to shuffle around & make 'em look legit. It's painfully clear under Bush the SEC has completely blew its enforcement responsibility. Fer crissakes, they couldn't be bothered to follow up on Bernie Madoff's decade-long whistleblower. How did we come to this? It can't entirely be chocked up to misplaced priorities & the SEC/Wall Street crony culture, right?

It's not. In an appearance yesterday before a House appropriations subcommittee, new SEC Chairman Mary Schapiro said something I found interesting:

Schapiro asked lawmakers to allow the agency to use $17 million from previous budgets that went unspent. She said the money is needed to maintain adequate staffing levels and upgrade technology.

$17 million in previous SEC budgets unspent? Budgets being plural. That's craaazy. Government agencies, particularly Bush administration government agencies, typically overspend & do a shitty job.

By its underspending during the Bush years an understaffed & technologically backward SEC went totally against type. (Other than doing a shitty job that is). SEC's techological shortcomings & budget surplus do not square with former Chairman Christopher Cox's oft-stated tech upgrade mandate.

A private sector manager desperately needing additional staffers & an IT boost will likely spend every last cent available to correct it. Almost all public sector managers, save the SEC, would do likewise. It's only natural to do anything possible to make your job better, easier.

George W. Bush's SEC literally couldn't have done a worse job if they tried. That the agency left $17 million on the table demonstrates pronounced apathy towards it performance. This apathy allowed Bernie Madoffs to swindled thousands of investors around the world.

-AF