Lawmaker urges Bush to boost SEC staff, fund pay raise

House Financial Services Committee ranking member John LaFalce, D-N.Y., has asked President Bush to fully fund a pay raise for Securities and Exchange Commission employees and to support a major increase in staffing at the agency.

In a letter Thursday, LaFalce urged that the pay parity provisions, enacted as part of the recently signed Investor and Capital Markets Fee Relief Act, be fully implemented.

"I believe that the pay parity provisions included in the legislation can help the SEC to attract and retain high quality staff at a time when the issues faced by the SEC are more complex than ever," LaFalce wrote. But he added, "Pay parity authority cannot help, however, if it is not funded."

LaFalce also urged that the number of SEC staff be increased by a minimum of 25 percent overall, with the additional staff to be allocated primarily to the corporate finance and enforcement areas.

According to LaFalce, taking these steps would require a budget increase for the SEC of at least $200 million over its fiscal 2002 budget of $438 million.

"While costly, it is much cheaper than the losses to investors and our economy of continued financial scandals, failures, and lack of confidence in our markets," he wrote.

LaFalce told the president he was "very disappointed" Bush did not use his State of the Union address this week "to provide greater leadership on the serious problems facing our public securities markets, which play a crucial role in the sound functioning of our economy. While we do not yet know all of the facts that led to the collapse of Enron, it is already clear that the oversight of our public securities markets and the enforcement of our securities laws have not been adequate to stem the abuses that have occurred in companies of all sizes."