John McCain said that head of the SEC should be fired for his bungling of oversight of corporate securities. Indeed, the head of the SEC himself admitted that oversight flaws fueled the economic collapse.
However, trying to blame the lack of oversight solely on a “rogue” SEC is like trying to blame the White House torture policy on “a couple of bad apples”.
Obviously, this administration has exerted tremendous control over all of its agencies.
More importantly, as Business Week wrote on May 23, 2006:
“President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations.”
Negroponte was a key figure in the illegal Iran-Contra scheme. Yet he and his successors – in the name of “national security” – could tell companies such as AIG, Lehman, Bear Stearns, Washington Mutual, Wachovia, etc. that they could use phony accounting and keep the SEC in the dark.
How many times did Mr. Negroponte and the next intelligence czar nod and wink in this way? Which companies did they give a pass to? What “national security” crisis prompted them to exercise these extraordinary powers? And who in the White House and Congress ordered, signed off on, or who knew of, their actions?