Rep. Cox to Replace Donaldson as SEC Chairman

William DonaldsonJune 2, 2005. William Donaldson (at right), Chairman of the Securities and Exchange Commission (SEC), announced his resignation, effective June 30, 2005. See, June 1 SEC release. On June 2, President Bush announced his intent to nominate Rep. Chris Cox (R-CA) to be the next SEC Chairman. See, White House release.

President Bush stated in a release that "Bill Donaldson took on a tough job at a tough time, and he delivered for the American people. He vigorously and fairly enforced our Nation's securities laws and helped rebuild the public trust in corporate America that has been important to our economic recovery."

President Bush spoke at a White House event on June 2. He stated that "I've given Chris a clear mission: To continue to strengthen public trust in our markets so the American economy can continue to grow and create jobs. The nation is increasingly a nation of stock holders. A generation ago, only a small percentage of American families invested in stocks and bonds. Today, more than half of households are investing -- for their families and for their futures. Now more than ever, we must make sure Americans can rely upon the integrity of our markets." See, transcript.

Rep. Cox is the Chairman of the House Homeland Security Committee (HSSC). Hence, if confirmed, the position of Chairman of that Committee would be open.

Chris CoxRep. Cox (at left) was for a long time a member of the House Commerce Committee. He had retained the prerogative of returning to that Committee, with seniority, at the expiration of his Chairmanship of the HHSC. He had been the most free market, anti-regulatory, member of the Commerce Committee, and its Subcommittee on Telecommunications and the Internet.

He had long argued against expanding Federal Communications Commission (FCC) authority to new information technologies and services.

In May of 2004 he stated at a hearing that the FCC should be abolished, because it was created to regulate communications markets characterized by scarcity and lack of competition -- conditions which no longer exist. See, story titled "Rep. Cox Suggests Shutting Down the FCC" in TLJ Daily E-Mail Alert No. 902, May 20, 2004.

At a hearing last fall, he excoriated the FBI for its efforts to obtain authority to regulate new information technologies under the guise of the Communications Assistance for Law Enforcement Act (CALEA).

Rep. Cox has also long been the leading proponent in the House of legislation banning internet access taxes, and discriminatory taxes on e-commerce.

If confirmed, Cox would not be present in the House to play a significant role in the debate over any rewrite of the Communications Act, the CALEA, or internet taxation laws.

Rep. Cox's departure is the latest in a string of departures of tech friendly Representatives. During the mid and late 1990s there was a group of Representatives who zealously opposed many efforts to regulate or tax new information technologies and services. Some went to the Senate, such as Sen. Ron Wyden (D-OR). Some lost elections, such as Rick White (R-WA). Some lost other elections, such as Tom Campbell (R-CA). Some lost their zeal.

On the other hand, Chris Cox might accelerate modernization of SEC rules, which remain largely based on 1930s concepts of securities trading. For example, rules and statutes might be revised to take into consideration internet based dissemination of information.