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Sent: Thursday, February 13, 2003 3:24 PM
Subject: Money in Politics Alert -- SEC Chairman Nominee William H.
Donaldson MONEY IN POLITICS ALERT Vol. 7, #4; February 13, 2003 tel: 202-857-0044, fax: 202-857-7809 email: [EMAIL PROTECTED], web: www.opensecrets.org; www.capitaleye.org; www.fecwatch.org A Friendly Face: How Soon-to-Be SEC Chief William Donaldson Wooed the Senate Banking Committee By Sheryl Fred By most media accounts, William H. Donaldson, President Bush's pick to replace Harvey Pitt as head of the SEC, should have had a tough confirmation hearing Feb. 5. Fortune, Forbes, Business Week and Bloomberg all reported that a number of investors had questioned the wisdom of approving Donaldson--who has a corporate governance record that's spotty at best--for the post at the embattled agency. As head of Donaldson Enterprises in the '80s, the investment banker ran an offshore fund incorporated in the Cayman Islands. As head of the New York Stock Exchange in the early '90s, he allegedly ignored millions of dollars in illegal floor trades and pushed to weaken accounting rules for foreign companies listed on the exchange. As CEO of Aetna Inc.--where he was paid nearly $20 million for just over a year of service--he reportedly covered up accounting misstatements. As a member of the board and compensation committee for EasyLink Services Corp., an Internet transaction company, he voted to forgive a $200,000 loan to the CEO when EasyLink's shares fell precipitously last April. And finally, Donaldson, who founded one of Wall Street's most prominent investment firms, denounced the SEC rule that mandates fair disclosure of market-sensitive information as "terrible" and "crazy" in statements made last year. "If he comes into the SEC with that kind of agenda, he might as well be walking in carrying his own head," John Markese, president of the American Association of Individual Investors, told Bloomberg in December. But it appears that Donaldson will be walking into the SEC with his head held high. After a nearly seamless confirmation hearing--in which Donaldson denied any wrongdoing in his previous posts and vowed to "vigorously enforce" the recently enacted accounting reform bill--the Senate Banking Committee approved his nomination by voice vote Feb. 11. It doesn't hurt that Donaldson, a longtime Bush family friend, is also on friendly terms with several Senate Banking Committee Democrats, not to mention a host of other senators, who are likely to approve his nomination later this week. While Donaldson has given little to politicians through individual contributions (just $5,500 since 1989), his investment firm, Donaldson, Lufkin & Jenrette, gave a total of more than $1.3 million (56 percent to Republicans; 44 percent to Democrats) in individual, PAC and soft money contributions between 1989 and 1998.* Perhaps more importantly, $110,850 of these contributions went to current members of the Senate Banking Committee--most of them Democrats. Charles Schumer (D-N.Y.), a longtime friend of Donaldson's and the leading Democrat on the Economic Policy Subcommittee, received $84,000 from DLJ between 1989 and 1998. And Christopher Dodd (D-Conn.), ranking member of the Securities and Investment Subcommittee, received $17,250 from the investment firm in that same period. Other banking committee recipients of DLJ's goodwill include Evan Bayh (D-Ind.); Rick Santorum (R-Pa.); Wayne Allard (R-Colo.); and Chuck Hagel (R-Neb.). In addition, during Donaldson's 14-month stint as CEO of Aetna, the company contributed $14,000 to Senate Banking Committee members and another $517,040 to other federal candidates, PACs and parties. Eager to replace the lame-duck Pitt, who resigned amid controversy in November but is still on the job two weeks into February, Senate sources have said they expect Donaldson to start work as early as next Tuesday. *DLJ was acquired by Credit Suisse First Boston in 2000. Contributions from DLJ for the 1999-2000 election cycle and beyond cannot be separated from those of its new parent company. ### Click here for the Web version of this report on the Center's newsletter site, CapitalEye.org: http://www.capitaleye.org ================================================ Subscribe to or unsubscribe from this list here: http://www.opensecrets.org/alerts/index.asp <A HREF="">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. 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