SEC Commissioner Mary Jo White is a former partner at Debevoise Plimpton; her husband is at the Cravath firm. Both law firms regularly represent companies being investigated or charged with misconduct by the Securities and Exchange Commission.
Appointed by President Obama and confirmed by the Senate two years ago, She does not participate in cases involving her former firm or her husband's. When that happens the five member SEC is split between Democratic and Republican members whose philosophical differences can lead to stalemate.
What RPC's compel these recusals? Does the fact that her standard of living depends on her husband's earnings on behalf of companies subject to oversight and regulation compromise her ability to vigorously enforce the law? Should her nomination have been rejected by the Senate? Should she resign her position?
- gwc
by Peter Eavis and Ben Protess
Their legal careers, and by extension their marriage, are the stuff of lore. Mary Jo White leads the Securities and Exchange Commission; her husband, John, practices law at an old-guard firm as elite as the corporations it represents. Together, they are a legal power couple that straddles Wall Street and Washington like few others. Their careers, however, can at times collide, generating headaches for the S.E.C. as it pursues wrongdoing in the nation’s financial markets, according to interviews with lawyers and a review of federal records. In the nearly two years since Ms. White took over the agency, she has had to recuse herself from more than four dozen enforcement investigations, the interviews and records show, sometimes delaying settlements and opening the door, in at least one case, to a lighter punishment.
The interviews and records detail for the first time the extent of Ms. White’s recusals and the implications of her absence. When ethics rules force her out of cases, the S.E.C. loses her expertise as a former federal prosecutor who has pledged a tough line on Wall Street, underscoring the unintended consequences of recruiting government officials from the small world of the legal elite. Ms. White has sat out of cases that involve Debevoise & Plimpton, where she worked as a defense lawyer, and her clients there, which included JPMorgan Chase and Bank of America’s former chief executive. Those restrictions, which account for most of her recusals, end in April. But in a surprising twist, Ms. White will have to keep sitting out cases that involve her husband’s firm, Cravath, Swaine & Moore. So far, she has had to recuse herself from at least 10 investigations into clients of Cravath, interviews and records show, including some that came before Ms. White joined the agency and at least four that involved Mr. White himself.
Because of ethics rules that Ms. White follows, she must leave all Cravath cases in the hands of the commission. Without Ms. White, some cases have split the agency’s four remaining commissioners, pitting two Democrats who have endorsed the public uproar over financial wrongdoing against two Republicans who have expressed reservations about levying big corporate fines. Ms. White, a former United States attorney in Manhattan who promotes big fines and admissions of wrongdoing, would otherwise provide the deciding fifth vote.
The prospect of a party-line stalemate without her has helped shape a case against the Computer Sciences Corporation, a large technology company suspected of accounting irregularities. Knowing that they faced a split commission, S.E.C. enforcement officials discussed the case with at least one Republican commissioner, focusing on the size of the financial penalty. After those discussions and negotiations with Cravath, the officials agreed to settle for $190 million, tens of millions of dollars less than the agency originally pressed for, according to lawyers briefed on the matter who spoke on the condition that they not be named."
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