Mary Schapiro, chair of the Securities and Exchange Commission (SEC), has hired a lawyer to guide her through an investigation into her agency’s signing a half-billion-dollar office lease it could not afford.

 

The $557 million lease “grossly overestimated” the amount of office space needed, and was not awarded competitively, according to the SEC’s inspector general. The probe also found agency officials produced a document formally justifying the lease that was prepared a month after the deal was finalized…and backdated to give the impression it was written prior to the signing.

 

In addition, the SEC leased the space before Congress had approved funding for the large staff increase the agency was anticipating.

 

When she met privately with members of the inspector general’s office to provide sworn testimony on the controversial deal, Schapiro brought along her lawyer, Richard Sauber, a partner in the Washington law firm of Robbins, Russell, Englert, Orseck, Untereiner & Sauber, and a veteran of the Department of Justice.

 

Schapiro originally joined the SEC in 1988 when President Ronald Reagan gave her a recess appointment. She served until 1994, when President Bill Clinton chose her to be chair of the Commodity Futures Trading Commission, a position she held for two years. When President Barack Obama tapped Schapiro to head the SEC in 2009, the choice was considered a controversial one because of her long-held connections with the industry she was supposed to regulate. In addition, in 2001, while working as president of the National Association of Securities Dealers, she appointed Mark Madoff, son of soon-to-be disgraced financier Bernard Madoff, to the board of the National Adjudicatory Council of the Financial Industry Regulatory Authority (FINRA).

 

Schapiro isn’t the only current or former SEC lawyering up these days.

 

Former SEC general counsel David Becker hired William Baker III in response to a probe into an alleged conflict of interest involving the agency’s work on compensation for victims of Bernard Madoff’s investment fraud. The same investigation prompted William Lenox, former head of the SEC’s ethics office, to request the help of Harvey Pitt, a former SEC chairman.

-Noel Brinkerhoff, David Wallechinsky

 

SEC Officials ‘Lawyering Up’ (by David S. Hilzenrath, Washington Post)

SEC Leased Unneeded Space in D.C., Watchdog Report Says (by David S. Hilzenrath, Washington Post)

Mary Schapiro (AllGov)