That's just a sampling of the many compliments paid to former Wall Street defense lawyer Mary Jo White in January 2013, when President Barack Obama nominated her to run the Securities and Exchange Commission (SEC), a major banking watchdog. But after more than a year in charge, White hasn't lived up to the hype, instead crafting weak regulations, delaying new rules to rein in the industry, and granting special privileges to a bank involved in fraud.
Rule-making is slow as molasses: Cracking down on individual banks is important, but in order to prevent another financial crisis, the SEC needs to address broader problems in the financial system. The commission is supposed to do that by crafting provisions of the 2010 Dodd-Frank financial reform law into scores of enforceable rules. White promised she would prioritize finishing up these regs, but rule-making at the SEC has slowed to a crawl since she took the helm of the agency. Over the past year, White has pushed back expected completion dates on 64 percent of rules. Contrast this with the progress made by the Commodity Futures Trading Commission (CFTC), another federal Wall Street regulator with similar jurisdiction, which has finished writing nearly all of its Dodd-Frank rules.
"We should've gotten a lot of these rules done already," an SEC official told the Financial Times in May. "By delaying and delaying, someone else is winning and it's not the people fighting for reform."
Republican obstruction isn't to blame. There are five commissioners at the SEC who vote to approve new regulations. Three of them, including White, are Democrats. That means White should be able to easily secure a majority of votes in order to finish up all those rules. That she hasn't done so suggests she doesn't want to, financial reformers argue. When she was confirmed to head the SEC, White said she would make sure Dodd-Frank regulations didn't impose "unnecessary burdens" on financial firms. Last July, former CFTC chair Gary Gensler told Bloomberg that White and Treasury Secretary Jack Lew seemed more like banking lobbyists than federal regulators when they met with him to talk about how banking rules should apply to US firms' overseas branches.
Rules that the SEC has finalized are full of loopholes: The few regulations that the SEC has completed over the past year are "weak," says Marcus Stanley, the policy director at Americans for Financial Reform. A measure the SEC finalized about a year ago, for example, makes it easier for start-ups to go public, but it does not contain enough protections for investors, Stanley says. And reformers say that a rule the SEC finished up last fall, which was supposed to curb abuses in certain parts of the bond market, has a number of crucial loopholes.
Regulations in the works are toothless, too: The rules the SEC is still hammering out are also disappointing, progressives say. A measure the SEC started working on before White's time, for instance, is supposed to ensure that credit rating agencies—companies that rate financial firms' ability to pay back debt—stop the sloppy ratings practices that led to the financial crisis. Reform advocates say White could improve the "ineffective" rule before the commission votes on it, but she hasn't made a move to do that. The SEC is also considering adding new exemptions to an already weak proposed rule governing certain types of mutual funds.
The agency dropped a corporate political spending measure: Last November, White nixed a much-touted initiative to require corporations to disclose their political spending.
White voted to give special privileges to a bank accused of fraud: In another business-friendly move in April, White voted with the two Republicans at the SEC to give special benefits to the Royal Bank of Scotland (RBS), despite the fact that the bank recently plead guilty in connection with an interest rate-rigging scandal. The SEC allowed RBS to raise money by offering securities without waiting for approval from the agency, even though companies that break the law are supposed to be denied this benefit. Democratic commissioner Kara Stein slammed the decision, noting that "we repeatedly relieve [firms] of the supposedly automatic consequences of their misconduct."
An SEC official maintains that the SEC "continues to vigorously pursue all aspects of its mission," and notes that the agency has completed several rules, including the massive Volcker rule, which limits the risky trading by commercial banks that helped lead to the financial crisis.
"Excellent. Job well done," counters a congressional Democratic aide. "We haven't seen much since."
On Monday, the Supreme Court ruled that most private companies are not required to provide contraceptive coverage to their employees, as mandated by Obamacare. Four years after the high court ruled that corporations have free speech rights in its controversial Citizens United decision, the decision gives broad new privileges to corporations, granting them religious rights for the first time.
More MoJo coverage of the Supreme Court's Hobby Lobby decision.
The decision in Sebelius v. Hobby Lobby Stores Inc., the most closely-watched case of the year, says that certain companies—those with more than half of their stock owned by fewer than five people—do not have to adhere to the Obamacare mandate that employee insurance plans cover birth control, if the owners have a religious objection. This 5-4 ruling applies to about 90 percent of all American businesses, and 52 percent of America's workforce.
The majority decision, written by Justice Samuel Alito, held that if Hobby Lobby's owners believe that the contraceptives at issue cause abortions, the mandate is a burden on their religious beliefs: "[W]e must decide whether the challenged…regulations substantially burden the exercise of religion, and we hold that they do," Alito wrote. "The owners of the businesses have religious objections to abortion, and according to their religious beliefs the four contraceptive methods at issue are abortifacients."
Last week, House Republicans voted to protect companies that steal workers' wages.
According to the Department of Labor, many big firms that receive hundreds of millions of dollars a year in federal contracts—including Hewlett Packard, AT&T, and Lockheed Martin—have a history of wage theft. Wage theft refers to employer practices such as not paying overtime, paying employees with debit cards that charge usage fees, or requiring workers to arrive to work early to get ready without paying them for that extra time. On Thursday, House liberals introduced an amendment to a defense spending bill that would forbid the government from handing out contracts to companies that jack their employees' pay. The amendment barely passed, with 25 Republicans voting with Democrats in favor of the measure. But most GOPers—204 of them—voted against the change. (The full list is below.)
The Congressional Progressive Caucus (CPC), a group of about 70 liberal Dems in the House, has introduced the same anti-wage-theft amendment to other spending bills in recent weeks, in the hope that it will make it into the final version of one of those spending bills and be signed by President Barack Obama.
Last week, a top GOP House candidate in Washington state compared gay marriage to polygamy.
"Marriage is something more for religion to decide," Republican front-runner Pedro Celis said Thursday when asked about his stance on same-sex marriage at a GOP candidate forum, the Seattle Times reported. "Is this marriage or not? Polygamy—is it fine or not? It's a religion thing."
The National Republican Congressional Committee has backed Celis, a former Microsoft engineer, to run against Democratic Rep. Suzan DelBene in Washington's first congressional district. DelBene is expected to hold onto her seat in November, but national Republicans are trying extra hard to change that. The NRCC recently bumped Celis into the highest tier of its candidate recruitment and training program. Celis is now a "Young Gun," meaning that the committee considers him to be on a "clear path to victory."
In 2012, Celis voted against Washington's initiative to legalize gay marriage. He says same-sex marriage issues are best left to the states.
Celis wasn't the only one to express interesting views on same-sex marriage at Thursday's event. Another GOP contender, former county council staffer Ed Moats, said "homosexual marriage" is "anthropologically regressive." The Republican primary will be held on August 5.
Before this event, Celis had said his campaign was focused on Obamacare and jobs.
A convoy of fighters with the Islamic State of Iraq and Syria, an Al Qaeda-linked group
With the crisis in Iraq intensifying, conservative media outlets have searched for a fall guy and found one: President Barack Obama. In recent days, conservative websites have peddled the claim that it was Obama who freed the leader of the Islamic State of Iraq and Syria (ISIS), the Al Qaeda-inspired Islamic militant group currently overrunning cities in northern Iraq and threatening Baghdad. Referring to Abu Bakr al-Baghdadi, who heads ISIS, the Daily Mail asserts, "Obama SET FREE the merciless terrorist warlord now leading the ISIS horde blazing a trail of destruction through Iraq." Right-wing author David Horowitz's FrontPage Magazine claims Baghdadi, who was once held by US forces in Iraq, was released "on Obama's watch." And RedState.comsays Baghdadi was let go under the Obama administration's "policy of releasing terrorists." But they have it wrong: It was an agreement signed by President George W. Bush in 2008 that led to Baghdadi's release in 2009.
In 2005, US military forces captured Baghdadi. (There are not many public details about his capture or his role then in the ongoing insurgency.) He was held in a US-run detention camp in southern Iraq called Camp Bucca, where he remained for several years.
In 2008, while reducing the numbers of US troops in the country, Bush signed an agreement with the Iraqi government that mandated that all detainees be handed over to Iraqi forces. In accordance with this agreement, Baghdadi was transferred to Iraqi custody in 2009, and by 2010, the Iraqi government (for a reason not explained publicly) had set him free. That same year, Baghdadi assumed leadership of ISIS. He has since been dubbed "the new bin Laden."
It's not as if Bush could have prevented Baghdadi's release by maintaining control over detainees—in part because his administration had so screwed up on this front. (See Abu Ghraib.) At the time, "the United States' detainee programs had become a black eye," says Patrick Johnston, an expert on Iraqi insurgent groups at the RAND Corporation. US-run detention facilities were overcrowded; some prisoners were tortured. Continuing a large US-controlled detainee program "was a political nonstarter," he adds.
Once detainees were out of American hands, "the United States has relatively little leverage over its friends' and allies' choices," says Jacqueline Hazelton, a counterterrorism expert at the Naval War College. (She does not speak on behalf of the college.) And there was no telling what the Iraqis would do with the tens of thousands of suspected insurgents handed over.
As for Baghdadi, he was not identified as a particularly dangerous detainee. "He was a bad dude, but he wasn't the worst of the worst," Kenneth King, the former commander of Camp Bucca, told Fox News last week.
Many other prisoners like Baghdadi were released once the United States transferred them to the Iraqis, says Theodore Karasik, the director of research and consultancy at the Institute for Near East and Gulf Military Analysis. And this is not an uncommon practice. Afghanistan, which last year took control of the last US-run detention center there, has already released prisoners against US objections.
Last week, Baghdadi's Sunni terror group, which counts up to 10,000 members, seized the cities of Mosul and Tikrit, routing US-trained Iraqi troops with stunning speed. ISIS, which sprouted up after the US-led invasion in 2003, is said to make "Al Qaeda look old-fashioned"; it is extra ruthless, well funded, and Twitter savvy. The militant group already controls parts of northern Syria and much of western Iraq, and it is fighting to take control of nearly two dozen more major Iraqi towns and cities.
Under Baghdadi's leadership, ISIS has become a profound and vexing threat to the Iraqi government and the region, but his rise to power cannot be pinned on Obama. If conservatives want to cite Baghdadi's release as a cause of the current crisis, then they should focus on the guy in charge before Obama.