another nominee snag?

Posted on January 12, 2009

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So much for the soon-to-be Obama administration’s so-called stringent vetting processes for hiring staffers.

Bill Richardson has already withdrawn from being considered as Commerce Secretary.

The choice for the next attorney general, Eric H. Holder Jr., continues to face much criticism and skepticism for his years in private practice and his dodgy recommendations for presidential pardons during the Clinton administration.

Now, yet another Obama selection is under scrutiny. This time, it’s Mary L. Schapiro, who’s slated to head the U.S. Securities and Exchange Commission.

Schapiro is named in two lawsuits for making misleading statements to expedite the merger of the New York Stock Exchange’s and the NASD’s regulatory units. As a result of the merger, her pay also rose 57 percent, to over $3.1 million, the New York Times reported.

The Obama transition team said they were aware of the lawsuit and played it down. It said it would not have nominated Schapiro had they felt it might be a problem down the line.

Given the present economic climate, the next SEC chairperson is expected to get tougher on wayward Wall Street institutions, enforcing financial regulations and sniffing out potential Bernard Madoffs before they take off with more investors’ cash. Schapiro is ultimately expected get through the confirmation hearings and get the SEC job, but this could cast a pall over the proceedings.

Add to that the scrutiny Schapiro could also receive for failing to sniff out the Madoff scandal in her capacity as the head of the Financial Industry Regulatory Authority, the watchdog that supervises nearly 5,000 U.S. brokerages.

Perhaps the Obama team needs an even tougher and more invasive vetting process than the one it already currently has. Or at the very least, they ought to read through every page of the applicants’ forms carefully, so that there won’t be unpleasant surprises later.

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