The Securities and Exchange Commission Chairwoman Mary Schapiro and her bureaucrat underlings came under fire once again in a hearing on Wednesday for the agency’s decision to lease 900,000 square feet of unneeded office space at Constitution Center in downtown Washington, D.C. The bureaucrats that pulled the trigger obligated the taxpayers to pay $556 million in lease obligations over the course of the next 10 years.
Rest assured these bureaucrats are going to have some major legal problems if the Department of Justice (DOJ) pursues a criminal investigation on the $556 million lease debacle.
The DOJ is most likely looking into the backdating of a required document justifying the choice of the new space which was dated a few days after the lease was signed. However, the SEC Inspector General believes the justification document was actually finalized a month later.
During the June 16th hearing on the SEC’s leasing practices, Rep. Tim Walz (D-MN) referred to the leasing debacle as a “beach ball” for Republicans to hit at the flawed Dodd-Frank bill because the Securities Exchange Commission (SEC) “can’t do anything right”.
The politically toxic beach ball in play is only getting bigger because backdating a leasing document is illegal. Furthermore, the consequences for the inept bureaucrats that inflated it could lead to fines or prison time if pursued by the DOJ.
The question that no one from the SEC has been able to answer definitively is why did the SEC leasing officials rush into a $556 million lease obligation?
The only explanation Shapiro offered on Wednesday was that leasing officials came to her for emergency approval because other agencies were vying for Constitution Center and it was within walking distance from the current headquarters. However, according to Google Maps it would take approximately 30 minutes to walk and it’s hard to believe other office space was not closer by and available in this economy.
Shapiro’s explanation doesn’t add up and the reasons or incentives for the bureaucrats that made the decision to obligate the taxpayer to a $556 million lease are unknown. If the DOJ decides to pursue a criminal investigation, Shapiro’s bureaucrats might want to leave the Rolex watch or foreign automobile at home for a while.
The track record at the SEC – not noticing Enron shell game, failing to catch Maddoff, employees watching pornography during the financial crisis, and signing a 900,000 square foot lease for unneeded space – leads one to believe anything is possible when it comes to an employee at the SEC.
The SEC has an established record of nonfeasance with respect to its responsibilities. The fact that they cannot even follow the law when making decisions about their office space suggests that the negligent, lackadaisical, and entitled attitude in within the organization is still in need of a remedy.
- To view documents and video related to Congressional Hearing - The Securities and Exchange Commission's $500 Million Fleecing of America: Part Two - Click Here