By On the occasion of our 20th anniversary
By Gustavo Arellano
By R. Scott Moxley
By Alfonso Delgado
By Courtney Hamilton
By Joel Beers
By Peter Maguire
By Charles Lam
The Lion That Meowed
Chris Cox says he’s a tough Wall Street regulator at the SEC, but the record proves otherwise
If you’re weary of depressing economic news, I offer this positively hallelujah! report: The nation must endure Orange County’s very own Christopher Cox as the top federal regulator of Wall Street for only about 120 more days.
Christopher who? He’s the fake-front-toothed man who for 17 years in Congress helped defang the Securities and Exchange Commission and, for the Wall Street investment giants who poured millions of dollars into his campaigns, sabotaged reforms to protect investors from sneaky, unethical corporate bosses.
Even now—given all that we know about the incompetence of George W. Bush on everything from Katrina to Kabul—it’s difficult to imagine that in 2005, the president appointed Cox (rhymes with fox) to oversee the SEC (doesn’t rhyme with henhouse). However, I can imagine the OC Business Journal’s Rick Reiff arguing it’s unfair to blame the Newport Beach politician for the crisis that had economists claiming the nation was teetering on financial collapse because of Wall Street shenanigans.
True, Rick. Cox—married to a corporate lobbyist, known to wear business suits to beach picnics, avoided Vietnam War duty—didn’t cause these messes. (Indeed, Wayne Barrett, a reporter at our sister paper the Village Voice, lays a portion of blame on President Bill Clinton’s low-income-housing policies.) But John McCain wasn’t boneheaded, as the mainstream media portrayed him, for saying he’d like to fire Cox, his fellow Republican.
Why? At a time when the nation needs an honest, competent top bureaucrat at the SEC, we’ve got an Ayn Rand fan whose career has been nothing if not serving moneyed interests—whether by pushing for special loopholes for firms such as Enron, claiming further reductions in the estate tax for multimillionaires would solve economic woes and rewarding corporations that relocated offshore with tax breaks.
In fairness, Cox has done exactly what Wall Street and this White House wanted him to do at the SEC: nothing.
As soon as it was clear in June 2005 that Senate Democrats were spineless about blocking Cox’s confirmation, I forecast coming doom (see “The Smart Guy,” June 3, 2005). The column noted that corporate lobbyists were giddy about Cox taking over the SEC because they also foresaw lax law enforcement. In April, The New York Times investigated and concluded, “The SEC seems to be bending over backward to not discomfort the banks and firms it regulates.” According to the Times, during Cox’s watch, the agency’s enforcement budget was reduced, meaningful penalties reduced to wrist slaps for corporate cheaters and crooks got to keep billions of dollars more in ill-gotten gains.
On Sept. 26, Cox conceded what has been obvious since the Great Depression but is, allegedly, breaking news to him. In the understatement of the year, he observed, “The last six months have made it abundantly clear that voluntary regulation does not work.”
Cox, who claims he’ll resign when Bush leaves the White House, hasn’t entirely emerged from Fantasyland. His current official bio is proof of stark delusion or deceit. He predicts his legacy is that he “made vigorous enforcement of the securities laws the agency’s top priority.”
Back in reality, the SEC’s inspector general issued a report last week that blasted the agency for allowing companies to ignore basic disclosure requirements and for watching idly as Bear Stearns collapsed.
In some quarters, inaction is applauded. The Wall Street Journal opinion editors, folks who celebrate Cox’s laissez-faire stance, damned him with their praise. On Sept. 19—while the nation’s largest private financial institutions were toppling like greased dominos and demanding taxpayer bailouts, the Journal observed—favorably—that Cox had done nothing except “change some minor rules.”
Stephen Robert Deck spent 23 years in the California Highway Patrol (CHP), and by 2006, he had attained the rank of lieutenant in his agency’s San Juan Capistrano office. But, if prosecutors are right, the then-52-year-old Deck had a secret: He was interested in man-girl sex relations that are illegal in 49 states.
(I’m kidding. Pedophilia is illegal in Texas, too.)
On Sept. 19, Deck—who was arrested in a 2006 Perverted Justice-Laguna Beach police sting—arrived in court to argue that the computer log of the racy chat he had with “Amy,” a decoy 13-year-old girl, should not be admitted into evidence and the case dismissed because his intentions were nonsexual.
As proof, Deck asked a judge to consider a final line he typed in the chat before going to meet the girl: “I wasn’t even thinking we’d do anything.”
(Note: Cops—especially veteran ones—know that prosecutors must prove that a defendant intended to break a law.)
But the judge wasn’t impressed by the cop’s angling. Deck had also called the girl a “hottie . . . I’d love to date,” inquired when her parents wouldn’t be home, said scented candles and caressing would be “wonderful and delicious,” mentioned licking ice cream off her body, repeatedly misspelled the word “come,” suggested they “kiss and cuddle,” declared he wanted to “eat your pie,” and asked, “How did you like sucking cock?”