It figures. The Securities and Exchange Commission nets the federal government about $300 million in fees and fines, after its own expenses), but it is so poorly organized that, according to GAO audits, “basic accounting continually bedevils the agency responsible for guaranteeing the soundness of American financial markets.” Is this what “starving the beast” comes down to?

“It’s almost as if the commission is being set up to fail,” said Harvey L. Pitt, who was S.E.C. chairman from 2001 to 2003 and who now is chief executive of Kalorama Partners.

Dodd-Frank did authorize a doubling of the commission’s budget, to $2.25 billion, over the next five years — without providing the money for it. It also authorized the commission to spend as much as $100 million beyond its operating budget for new technology systems.

Ms. Schapiro said that buying new technology was crucial because it helped to attract specialists in mathematics and financial systems that the S.E.C. needed to help police the rapidly evolving financial markets.

“It’s very hard to attract great people if they think that there’s not going to be the opportunity to use technology to get the job done, which can make us so much more efficient,” she said.

It’s a pity that Edward Wyatt’s story doesn’t offer an explanation of where the SEC’s budget bloat — its funding doubled during the first GW Bush administration. Money isn’t everything; it can’t solve problems by itself, especially if administrators (such as former Chariman Christopher Cox) are not interested in solving them.

Drop me a line at rjk@dailyblague.com
This entry was posted on Thursday, February 3rd, 2011 at 10:30 am.