But they'll just find a way to replace them with their own people.
We just saw Elizabeth Warren on Colbert's new show. One of her solutions to keeping big business and the super wealthy in check is regulatory agencies that watch over them. It doesn't work so well if the people in charge of regulating things don't really want the watchdogs doing a good job.
The battle over an obscure yet important regulatory agency heated up on Wednesday as the progressive activist organization Credo demanded that SEC Chair Mary Jo White recuse herself from selecting the next head of the Public Company Accounting Oversight Board (PCAOB).
The oversight board was created after the Enron debacle, and charged with policing the big accounting firms whose audits are supposed to keep public companies honest. Its current chair, James Doty, has turned into one of the most persistent regulatory reformers in Washington.
White is considering ousting Doty in favor of someone more amenable to corporate sensibilities. White's husband, John White, a partner with the corporate law firm Cravath, Swaine & Moore, sits on the PCAOB's Standing Advisory Group. And Credo says that he and his Wall Street clients may be influencing her decision-making.
The PCAOB regulates auditors, who are supposed to independently assess whether public companies are delivering accurate financial information to investors -- or cooking their books. Timely auditing can ferret out financial fraud, protecting investors and the broader economy.
But just four firms -- Deloitte, PricewaterhouseCoopers, Ernst & Young and KPMG -- control virtually all the auditing of public companies in the United States. And they often have lucrative business consulting relationships with the firms they audit. With only self-policing, auditors have every incentive to put their future profits ahead of the truth.
After Enron -- when its auditor, the now-defunct Arthur Andersen firm, was convicted and driven out of business for shredding audit documents -- Congress believed that the watchmen had to be watched as well. They passed the Sarbanes-Oxley Act, which inaugurated the PCAOB, a non-profit corporation that sets auditing standards. Its five-member board gets appointed by the five SEC commissioners.
The worst part is this article says the SEC's Chief Accountant office is constantly undermining the PCAOB out of petty jealousy. Grow up. Do your job.
Here's a link to Credo's petition for those interested in signing it.
So what's a better solution more resistant to this sort of regulatory capture, if there is one? Is it just to have an electorate ready to pounce on any attempt to undermine regulatory agencies?
the only solution i ever approve of involves me having the One Ring, but i've told fnord12 to never ever let me have it.