Corporate Governance

The SEC, Congress, and the Harm of a Rogue Inspector General (Part 4)

By J Robert Brown Jr.

One thing is for certain, however, the approach by Senator Grassley is a wrong one.

His proposal, according to reports, would essentially allow for an Inspector General without accountability.  He would create a position that was accountable to noone, the President, Congress, or the Chair of the Commission.  Once appointed, the Inspector General could only be removed for cause.  While the Grassley Amendment apparently has a provision for "peer" review, this would be no substitute for actual oversight.   

The approach in the this case, unfortunately, reeks with political overtones.  Senator Grassley, a Republican, is taking a position that would protect the job of the Inspector General at the SEC, an individual who just announced an investigation undertaken at the request of a Republican congressman.   But it is a short term perspective.  In the longer term, its just as likely that it will be a Democratic chair who appoints an Inspector General who will embarass a Republican Administration.

Whether subject to removal by the President or the Chair of the SEC, either is better than removal by, and accountability to, no one.

Full post as published by The Race to the Bottom on May 13, 2010 (boomark / email).