A Senate committee voted Tuesday 21 to 1 in favor of Mary Jo White to serve as the new head of the U.S. Securities and Exchange Commission, with one lone holdout Senator Sherrod Brown, a Democrat from Ohio, who objected to White’s Wall Street ties.
The Senate Committee on Banking, Housing and Urban Affairs also voted 12 to 10 along party lines to approve the nomination of Richard Cordray to head the Consumer Financial Protection Bureau.
White is expected to win approval from the full Senate, while Cordray, now serving under a recess appointment, faces an uphill battle to win support from Republicans who object to the CFPB’s structure.
The former U.S. attorney for the Southern District of New York, White is currently a partner at Debevoise & Plimpton, where her clients have included former Bank of America Corp. chief executive officer Kenneth Lewis and former Goldman Sachs Group Inc. director Rajat Gupta. The firm has represented financial giants including Morgan Stanley, Barclays Capital, Credit Suisse, Deutsche Bank Securities, HSBC and Wells Fargo Securities.
To Brown, the relationships were apparently all a bit too cozy.
"We need regulators who will fight every day for taxpayers, Main Street investors, and retirees. But too often we have seen public servants who settle for the status quo, instead of demanding accountability," Brown said in a news release.
"I don’t question Mary Jo White’s integrity or skill as an attorney," he continued. "But I do question Washington’s long-held bias towards Wall Street and its inability to find watchdogs outside of the very industry that they are meant to police. Mary Jo White will have plenty of opportunities to prove me wrong. I hope she will."
During White’s March 12 confirmation hearing, Brown asked her what she had done during her time at Debevoise that benefited the American public. White, chairwoman of the firm’s litigation department since 2002, started to talk about her experience as U.S. attorney in Manhattan but was cut off by Brown, who again asked her to talk about her time at the firm."When you’re a lawyer you represent different types of clients and you are ethically bound to represent them to the best of your ability, and I have done that," White said. "This has not changed me as a person. It does not mean that I embraced the policy thoughts of any of my clients in particular.…In this instance if I am confirmed, the American public will be my client, and I will work as zealously as is possible on behalf of them."
John Alan James, the executive director of the Center for Global Governance, Reporting and Regulation at Pace University in New York, found Brown’s vote against White somewhat puzzling, noting that the senator is not up for reelection until 2018. "I don’t know why he’d be against her unless he thinks that she, like so many others, will go through the revolving door," he said. "Ms. White has had a very remarkable career."
While Brown declined to support White, he has been a staunch champion of Cordray, a fellow Ohioan. Brown and committee members Elizabeth Warren (D-Mass.), who came up with idea for the CFPB, and Jack Reed (D-R.I.) have called for an up-or-down vote on Cordray in the Senate.
That’s not likely to happen. In February, 43 Republican senators sent a letter to President Barack Obama pledging to block a vote on Cordray’s nomination "until key structural changes are made to ensure accountability and transparency" at the agency, which was created by the 2010 Dodd-Frank Act.
To Richard Gottlieb, head of Dykema Gossett’s financial industry group, the committee vote was "a non-event. It would have been more shocking if a single Republican had voted in favor" of Cordray, he said.
"The bigger battle is on the Senate floor," said Gottlieb, who is based in Chicago. "There is room for compromise here: a deal on the appropriations side would give Congress better control of the purse strings while preserving control by a single director."
Jenna Greene is a reporter for The National Law Journal, a Legal affiliate based in New York.
