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Bush Chooses Banker To Head SEC

Donaldson To Replace Pitt

WASHINGTON -- President George W. Bush has chosen investment banker William H. Donaldson to head the Securities and Exchange Commission, replacing Harvey Pitt who resigned under pressure amid a spate of corporate scandals, Republican officials said Tuesday.

Bush planned to announce his choice later today, said the officials, who spoke on condition of anonymity but were informed by the White House of the president's choice.

Donaldson, co-founder of investment banking firm Donaldson, Lufkin & Jenrette, was nominated as Chairman and CEO of the New York Stock Exchange in 1990 and served in that position until 1995.

Prior to that job, Donaldson was CEO of a private investment company, Donaldson Enterprises, which he founded in 1981. He was a founder of Yale University's Graduate School of Management and served as its first dean and held a tenured chair as the William S. Beinecke Professor of Management from 1975 to 1980.

According to a biography on the Yale business school website, Donaldson was a Marine who served from 1953 to 1955, in Japan and Korea as a rifle platoon commander. A Yale graduate who received his MBA from Harvard, Donaldson is a Chartered Financial Analyst (CFA) and director of a number of public and private and philanthropic corporations.

Bush was tapping Donaldson one day after he nominated railroad executive John Snow to replace Treasury Secretary Paul O'Neill and lead a retooled economic team.

Bush is promising a new tax-cutting economic package, which aides say could cost up to $300 billion over 10 years, as part of an effort to control political damage from the ailing economy.

Pitt resigned on Election Day after a series of gaffes exposed Bush to criticism over corporate wrongdoing scandals.

Bush fired O'Neill and White House economic adviser Larry Lindsey as part of an economic team house cleaning. Economist Stephen Friedman was Bush's tentative choice to replace Lindsey, but his prospects have dimmed in recent days amid criticism from conservatives who fear he is not a robust tax cutter.

Donaldson is known for a colorful candor reminiscent of O'Neill, whose off-message riffs contributed to his slide from grace in the Bush White House.

Shortly before he took over as chairman of the New York Stock Exchange on Jan. 1, 1991, he described the great bull market of the 1980s as "a somewhat ribald party" that left the securities industry -- and the U.S. economy -- with a severe hangover.

And the former Wall Street executive whose job it was to rebuild Wall Street's reputation for fair dealing after the 1980s, once decried the "chauffeured limousines lined up outside fancy, new glass towers, while the homeless congregated in Grand Central Station and lavish Park Avenue parties that made headlines while the lines lengthened at the soup kitchens."

A native of Buffalo, Donaldson's first job on Wall Street was at the old brokerage G.H. Walker & Co., run by former President George H.W. Bush's uncle Herbert Walker. Donaldson was a classmate of the former president's brother, Jonathan, at Yale University and is friends with the Bush family.

Donaldson is also a former U.S. Undersecretary of State.

-- Anonymous, December 10, 2002

Answers

Wasn't there talk of asking Erskine Bowles? I guess Erskine turned him down. Thank heaven for that.

-- Anonymous, December 10, 2002