I can't decide how I feel about Mary Jo White, President Obama's recently announced pick to lead the Securities and Exchange Commission.
On one hand, White seems eminently qualified to police Wall Street misdeeds, based on her career as a former prosecutor who got people like John Gotti and would-be UN bomber Sheik Omar Abdel Rahman put behind bars. "You don't want to mess with Mary Jo," President Obama said, convincingly, while nominating her yesterday.
On the other hand, White has also done some legal work on behalf of Wall Street honchos in her post-prosecutor role as a white-collar defense attorney — including former Morgan Stanley CEO John Mack and ex–Bank of America CEO Ken Lewis. And her work on the other side of the aisle certainly throws up a red flag or two about her ability to be as tough on financial malfeasance as she was on terrorists and Mafia dons.
So, to make up my mind, I decided to argue about White's qualifications — with myself. Below is an unedited transcript of the internal dialogue.
Point: Mary Jo White is eminently qualified to be the next SEC chief, based on her sterling tenure as a prosecutor of tough crimes.
Counterpoint: Based on her white-collar defense work, Mary Jo White is too chummy with bankers to be a good SEC chief.
P: So, what is your problem with MJ?
CP: Oh, is that what we're calling her?
P: I am. Seriously, though, how much tougher do you want her to be? Even The Wall Street Journal said that her appointment "could signal tougher policing of Wall Street."
CP: Well, sure, but the Journal also called her defense career "an awkward element of Ms. White's resume," since it involved, you know, defending the very people she's now supposed to be cracking down on. And we know how dangerous the revolving door between Wall Street and Washington can be.
P: Hold on, let's be rational about this. What, exactly, is your problem with appointing former defense lawyers to prominent regulatory positions?
CP: Where to begin? For one, the SEC has not exactly been known as an effective watchdog. And it's filled with former bank lawyers. Its outgoing enforcement chief, Robert Khuzami, worked at Deutsche Bank during the financial crisis. You saw that PBS documentary about how no bank executives have gone to jail over the crisis — why would we want more potentially captured regulators rather than fewer?
P: Roose, you ignorant slut! No. 1, there is no proof that SEC lawyers who come from white-collar defense backgrounds are laxer on crime than people who don't. In fact, there was a study last year that showed that SEC lawyers who come through the revolving door are actually more aggressive when it comes to enforcing the law against Wall Street than their peers. No. 2, lawyers are supposed to ensure fair treatment under the law, not sympathize with their clients — you really think the public defenders who defend rapists and murderers are less offended by those respective activities?
CP: Well, no, but ...
P: No. 3! Look at this passage from the Times' profile of MJ:
While former employees described her as "no nonsense," she was often spotted sipping a Bud Light at a weekly social gathering for junior prosecutors. And despite being barely 5 feet tall, she also was an exuberant point guard in a local lawyers' basketball league, and once arrived at a tennis match on a red motorcycle, while Helen Reddy's "I Am Woman" blared loudly.
Does that sound like a woman who is going to go easy on a bunch of overprivileged CEOs?
CP: No, it sounds like a boss. But listen to Senator Elizabeth Warren in Politico, talking about the danger of the revolving door: "Big business orthodoxy against rules and regulations can seep into the bones, including the bones of new policymakers who are charged with protecting consumers and strengthening markets." Doesn't that make sense, intuitively?
P: Well, yes. But it's also been shown to be false. Plus, in the worst cases, there's always the Joe Kennedy argument: "Takes a crook to catch a crook."
CP: Oh, great idea, you pompous ass. So let's appoint Bernie Madoff and Raj Rajaratnam to co-chair the SEC next term. They'll know every trick in the book!
P: I see your point. But let's get away from the theoretical arguments for and against appointing people with Wall Street experience to head regulatory agencies and get back to Mary Jo White specifically. Nobody is arguing that she is a pushover. Dennis Kelleher from Better Markets even called her "a tough, smart, no nonsense, broadly experienced and highly accomplished prosecutor" who "knew who the bad guys were, went after them and put them in prison when they broke the law." And that guy doesn't like anyone!
CP: I agree that, to the extent we can measure her character by her record as a prosecutor, she sounds pretty tough. I'm just not moved by her private work. Like, for example, not only did she defend John Mack and Ken Lewis, she defended Tommy Hilfiger.
P: So I guess we know she won't be tough on crimes ... against fashion!
CP: No, but seriously, the red motorcycle thing.
P: Totally badass.
CP: Confirm her now, Congress.