Statement of Rep. Carolyn B. Maloney U.S. House of Representatives
The past year will go down in history as one of the most scandal ridden in the history of our nation's capital markets. Enron, Global Crossing, Tyco and ImClone all raise the cloud of insider corruption, massive financial restatements and outright fraud on investors. The legislation before us takes an important step in assigning these episodes to history and ensuring that the Securities and Exchange Commission (SEC) has the resources to prevent future calamities.
This legislation commits significant new resources to the SEC, which I can attest are truly needed based on what we have learned from hearings in the Financial Services Committee. The bill authorizes $776 million for the SEC in FY03, $338 million more than the FY02 appropriations level and $233 million 43% more than the Bush Administration requested. At least $134 million will go to SEC's chief accountant and corporation finance division, $326 million to the enforcement division, and $76 million to fund "pay parity."
While these sums are significant and necessary, my colleagues are well aware that the agency is funded through transaction fees and not traditional tax revenue. The pay parity money is especially important given the staff crisis the agency has experienced in recent years. Having recently visited the SEC field office in the Woolworth Building in lower Manhattan, a facility that was formerly located in the World Trade Center complex, I can tell you that there is a real need for pay parity.
Pay parity will bring SEC employees up to the pay levels of their colleagues at the federal banking regulators. I believe the securities regulator should not be treated as a second class citizen behind the bank regulators. Its bad for investors and industry and this is a worthy investment. I have already circulated a bipartisan letter to the appropriators which was signed by 27 members of the Committee on Financial Services requesting funding for pay parity. I want to thank Ranking Member John LaFalce (D-NY) for advocating for this provision and Chairman Michael Oxley (R-OH) for holding to his commitment in last year's fee reduction legislation to win pay parity.
Passage of this legislation today is an important step on the road to winning back public confidence in our financial markets and rebuilding the trust of individual investors in financial reporting. It is my hope we build on this progress by passing real reform of the accounting industry this Congress. To that end I congratulate Chairman Paul Sarbanes (D-MD) for his overwhelming, bipartisan victory, by a 17-4 vote for his accounting legislation in the Senate Banking Committee. I look forward to seeing this legislation move to the Senate floor and to working with both sides of the aisle in conference where these important issues can be debated. I urge passage of the bill before us and I yield back the balance of my time.