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Your Federal Government at Work? Not!

The NY Daily News may have the best line involving the pornography story at the Securities and Exchange Commission (SEC): “At the SEC, all they thought about was SEX.” The lede of the Washington Post article provides the background: “Dozens of Securities and Exchange Commission staffers used government computers to access and download explicit images and many of the incidents have occurred since the global financial meltdown began, according to a new watchdog investigation.”

Mark Calabria of the Cato Institute suggests recent speculation about the SEC’s case against Goldman Sachs may be misguided. He blogs:

“There has been much speculation that the Securities and Exchange Commission (SEC) released its charges against Goldman Sachs on the eve of a Senate vote on new finance regulation in order to help Democrats win that vote.  Perhaps that theory is wrong: It now looks more likely that the SEC timed its Goldman case in order to divert attention away from two SEC inspector general (IG) reports criticizing the commission.

“In one of the reports, the SEC IG found that several of the top staffers at the SEC were spending their days surfing the web for porn, rather than looking for securities fraud.  One senior manager spent almost 8 hours a day looking a porn, getting to the point where he even filled up his government issued hard-drive with porn.  His actions were not some isolated incident.  Over 30 employees were found to have regularly used SEC computers to download and view porn.  Some of the senior employees had salaries as high as $222,000 a year.  Sounds like nice work, if you can get it.

“But the porn charges are the least of the SEC’s worries.  Also released was the IG’s report on the SEC’s failure to stop the Stanford Ponzi scheme.  The report shows a clear pattern of incompetence at the SEC.  Given the SEC’s failure to act on the Madoff scheme, and the repeated warnings about Stanford, one has to wonder how good SEC investogators are at discovering fraud if they don’t even pursue the clear-cut cases brought to them."

Some of the SEC employees were not low-level grunts, but according to the Washington Post today, several earned between $99,300 and $222,418 annually. And this from the law blog at the Wall Street Journal:

“Some of the findings are jaw-dropping. Like that senior attorney at the SEC’s Washington headquarters spent up to eight hours a day looking at and downloading pornography. And an accountant was blocked more than 16,000 times in a month from visiting websites classified as “Sex” or “Pornography.” Yet he still managed to amass a collection of “very graphic” material on his hard drive by using Google images to bypass the SEC’s internal filter.”

Finally, in a video at Real Clear Politics, Rep. Barney Frank (D-Mass.) “blames SEC porn scandal on Republicans” since “the culture of the SEC . . . Republican philosophy that was dominant during this period was one they do not regulate, let the market do it better.” Huh? But was there any Congressional oversight of the SEC? A search of the House Committee on Financial Services, chaired by Rep. Barney Frank, website for the 109th and 110th Congresses (2005 - 2008) for “pornography” found results related to child pornography or to the Internet, but nothing related to SEC employees “surfing” for pornography. So sorry Barney.

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