A leading Republican senator has lashed out at the Securities and Exchange Commission amid allegations that it fired an employee who tried to investigate a top fundraiser for President Bush.
In a letter dated Monday, Sen. Chuck Grassley, R-Iowa, says that the SEC hasn’t complied with a request that he and Sen. Arlen Specter, R-Pa., made, asking it to hand over documents relevant to the investigation of Wall Street titan John Mack and former SEC investigator Gary Aguirre.
Aguirre told a Senate panel last month that he was fired for trying to investigate Mack for insider trading. Mack, currently the chief of Morgan Stanley, was a major fundraiser for President Bush. Aguirre said he suspected Mack of tipping off Pequot Capital Management about a merger between GE Capital and Heller Financial.
Pequot bought into both Heller and GE just before the merger was announced and made millions in profit.
Mack later became chief executive at Pequot.
In Monday’s letter, which is addressed to SEC Chairman Christopher Cox, Grassley says that SEC staff claim, among other things, that they have missed Grassley’s and Specter’s deadline for handing over documents because it would compromise pending investigations by the agency and its inspector general’s office.
Grassley says that is “unacceptable” because the SEC only reopened it’s investigations after Congress began looking into Aguirre’s claims.
“It gives the appearance of a sort of gamesmanship that would be inconsistent with your previous pledges of full cooperation,” the letter states.
The SEC also said that handing over the documents would give the appearance of a politically motivated investigation, Grassley’s letter states.
Grassley says this line of defense is “ironic.”
“If the SEC were genuinely interested in protecting its enforcement division from improper political influence, one would have expected its inspector general to conduct a more thorough investigation of Aguirre’s allegation that he was prevented from taking the testimony of John Mack because of Mack’s ‘political clout,’” the letter states.
Aguirre has since sued the SEC and is being represented by lawyers from the nonprofit Government Accountability Project, a whistle-blowers’ group.
Mack was interviewed by the SEC last month and has publicly promised to cooperate with the investigation.
A Morgan Stanley spokeswoman refused comment.
Reached by phone, SEC spokesman John Heine would only say that his agency is “committed to cooperate with the committee and its staff to satisfy them as to the integrity of our investigative process.”
