----- Original Message -----
To: Alert
RecipientsSent: 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
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