Treasury and the SEC: Who should be in charge?December 4, 2012: 10:17 AM ET
Doormats or sycophant compromisers need not apply. A few candidates we should consider.
FORTUNE -- As we dig out from the worst financial crisis since the Great Depression, does it make sense to turn the keys over to those who drove us there?
Some have recommended Jamie Dimon for Treasury Secretary. He has run JP Morgan (JPM) since December 2005 and was in charge of the mega-bank in the run up to the financial crisis. JP Morgan has been at the heart of the derivatives and mortgage servicing fiascos and it has been bleeding billions in litigation expenses related to all manner of alleged misconduct under his watch. In addition, the SEC is looking into whether Dimon's own disclosures in April related to the impact of the massive London trading losses represent securities violations.
For SEC chair, Sallie Krawcheck's name has come up. She was Citi's (C) CFO in the run up to the crisis and then moved over to Bank of America to head its brokerage business. The nation felt the pain as Citi suffered mightily for its failure to exercise prudent risk management while she held the top finance job.
Some have floated Robert Khuzami as a contender for the SEC's top job. He's a former Deutsche Bank (DB) executive and is currently the SEC's enforcement chief. But Khuzami has come under fire for his failure to prosecute Wall Street executives over their roles in the crisis and its aftermath.
None of these candidates pass muster.
Washington already has public relations problems that rival, or even surpass, the ones Wall Street banks continue to face. Both Pew and Gallup polls show that trust in government to do the right thing is at historical lows, although these trust figures have seen an uptick recently.
Now, more than ever, as we work to rebuild our economy, we need heads of Treasury and the SEC who can restore public trust. In addition to adequate subject matter expertise, those nominated need to care deeply about the public good, first and foremost, and should have already demonstrated the capacity to place public interests over their own. They should be able to process a wide breadth of information thoughtfully. And they should be willing to speak out clearly, forcefully, and persuasively for the public interest.
So, who should be on the short list? If economists Joseph Stiglitz or Paul Krugman would be willing to take the job at Treasury, our country would owe them a great debt.
For the SEC spot, Brooksley Born would be outstanding. She ran the CFTC and warned Alan Greenspan and others about the mounting derivatives risks and potential for economic meltdown (which, unfortunately, they chose to ignore). More recently, she served on the Financial Crisis Inquiry Commission and serves on the private sector Systemic Risk Council. Other great candidates that meet the criteria include Lynn Turner, former SEC Chief Accountant; Damon Silvers who didn't mind asking Tim Geithner tough questions in his role as deputy chair of the Congressional Oversight Board for TARP; and Bill Black, a former bank regulator who proved during the savings and loan crisis of the 1980s and 1990s that he knows how to hold bankers to account.
Although some of us may have doubts as to whether Wall Street has been running the government, there's no need to make it official. Instead, we need chiefs who can counterbalance the lobbyists and end the stalemates. Doormats or sycophant compromisers need not apply. To restore public trust, we need outspoken advocates who'll act on behalf of U.S. taxpayers and citizens.
Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance (http://thevaluealliance.com), a board advisory firm.