New York’s Carolyn Maloney More Focused On Politics Than Investors

With Democrats like Representative Carolyn Maloney of New York, who needs the Republicans? When special interests pursue self-interested legislation  - or seek to block legislation that affects their interests  - Maloney waves the jobs and economic growth flag for campaign contributors rather than defending investors.

Maloney voted for the JOBS Act in spite of the fact the bill destroys investor protections hard-won after the Enron fraud in the Sarbanes-Oxley Act. Maloney also recently spoke up on behalf of the audit industry instead of investors during a hearing held by the House Subcommittee on Capital Markets and Government Sponsored Enterprises. PCAOB Chairman Jim Doty testified about several agency initiatives to increase auditor independence, transparency, and accountability for auditors behaving badly. Maloney joined Republican Congressmen who pushed back hard on Doty and the PCAOB, the audit industry regulator, accusing the regulator of  "mission creep" and "overreach".

Maloney represents Manhattan's East Side and Queen's West Side, the home of the financial services industry including the US headquarters of all of the Big Four accounting firms. Maloney serves on three key subcommittees of the House Committee on Financial Services because she, "believe[s] one of my chief tasks is to maintain the preeminence of New York City as the world's financial center." Maloney is "committed to defending the health of our financial institutions so that they can lead our economic recovery."

But, in my opinion, she's no expert on financial services or accounting policy.

Maloney's real interests show up at the most inopportune moments. Back in 2000, before the Enron scandal, Richard Baker, a Louisiana Republican, ran the House Subcommittee on Capital Markets. He was very worried at the time about Fannie Mae and Freddie Mac. Baker saw the writing on the wall with the mortgage giants, behemoth Government Sponsored Enterprises (GSEs) that were eventually nationalized under a conservatorship in September of 2008 because of the significant losses they racked up from subprime mortgage securitization. Taxpayers are still paying the bill for the inattention by so many for so long to the accounting manipulation, fraud, and excessive risk taking at the GSEs that put both public companies into receivership.

Read this article in its entirety at the re: The Auditors, a blog by Francine McKenna.

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