* White, CFPB nominee Cordray face confirmation hearing
* Sen. Vitter to criticize White over Saints bounty case
* Cordray expected to endure brunt of criticism
* Republicans plan to block Cordray; seek changes to bureau
* White may get questions on policy, defense of Wall St.
By Emily Stephenson and Sarah N. Lynch
WASHINGTON, March 12 Mary Jo White will likely
face questions about her work for big Wall Street clients when
senators on Tuesday consider her nomination to head the U.S.
Securities and Exchange Commission, but one lawmaker wants to
huddle about a field of another sort: football.
Senator David Vitter, a Louisiana Republican and big New
Orleans Saints fan, plans to ask White about legal work she
performed while at Debevoise & Plimpton for the National
Football League in the infamous "Bountygate" scandal.
The NFL hired White to review evidence that Saints players
were paid bounties from 2009-2011 to injure members of opposing
teams. As the allegations unfolded last year, she told reporters
the league's basis for issuing disciplinary actions was "quite
strong" and based on "multiple, independent, first-hand
Vitter says that the evidence against the individual players
was insubstantial and he is dissatisfied with White's
"If Mary Jo's work at the SEC is anything close to her
botched work for the NFL, folks who want to protect their
investments, like the victims of the Stanford Ponzi scheme, are
in trouble," said Vitter, who is not expected to block her
White and Richard Cordray, President Barack Obama's choice
to lead the Consumer Financial Protection Bureau, will appear
together before the Senate Banking Committee on Tuesday.
Though it will be White's first public opportunity to
discuss her background and views on financial regulation,
Cordray has been the more controversial figure as the leader of
the CFPB since January 2012, an interim position because
Republicans have so far refused to confirm him.
Obama used a procedural maneuver known as a "recess
appointment" to install him temporarily, and he re-nominated
Cordray in January.
Under his tenure, the CFPB has worked on an overhaul of
mortgage regulations. It has also taken on debt collectors and
brought several enforcement actions related to credit-card
Business leaders have been largely satisfied with Cordray's
leadership, and Republicans generally do not have problems with
him personally. But they have vowed to block any director until
Democrats agree to convert the bureau into a bipartisan
commission and change how it is funded.
Adding to the controversy, a U.S. appeals court ruled
earlier this year that recess appointments to the National Labor
Relations Board made at the same time Cordray was installed were
unconstitutional because lawmakers were not technically in
That ruling has raised questions about Cordray's appointment
as well, and he is expected to field questions from senators on
Tuesday about the work he has done and whether it could be
invalidated by the courts.
"We want people to know they now have a new agency standing
on their side, looking out for their interests, to help restore
their confidence in the consumer financial marketplace. So far,
even though our work is still in its early stages, we have been
busy addressing some of the most critical problems," said
Cordray in prepared testimony.
WHITE'S VIEWS ON POLICY UNKNOWN
While Cordray's appointment is more controversial, White is
still expected to face numerous questions from lawmakers. Little
is known yet about her views on securities regulatory policy.
She previously served as U.S. Attorney for the Southern
District of New York from 1993 through 2002, where she made a
name for herself prosecuting terrorists and mob bosses.
If confirmed, White would be joining the SEC at a busy time.
Currently divided between two Democrats and two Republicans,
the agency is struggling to agree on rules required by the 2010
Dodd-Frank Wall Street reform law for over-the-counter
derivatives and credit-rating agencies.
Also, the SEC is grappling with how to complete
controversial new capital-raising rules stemming from the 2012
Jumpstart Our Business Startups (JOBS) Act, a proposal to reform
the $2.6 trillion money market fund industry, and rules to
potentially revamp U.S. equities market structure.
Without a fifth crucial swing vote, relatively little
rulemaking has taken place since SEC Commissioner Elisse Walter
took over as chairman in December.
Internal disagreements between Democratic and Republican
commissioners last week about relatively non-controversial rules
to protect the market from technology errors nearly derailed
plans for an open public vote, according to people familiar with
White could face questions from senators about her views on
everything from high-speed trading and the risk of runs on money
funds to over-the-counter derivative regulations. In prepared
testimony, she did not give her opinions in detail, but did say
she saw a "sense of urgency" in examining market structure
matters such as high-speed trading.
In addition, she may be asked how she will manage conflicts
that could arise from the legal defense work she did for
Debevoise & Plimpton on behalf of high-powered Wall Street
clients, from JPMorgan and former Bank of America
CEO Ken Lewis to UBS to accounting giant
Deloitte & Touche LLP.
Federal ethics rules generally require her to recuse herself
for one year from participating in matters involving former
While she worked for some clients such as JPMorgan more
recently, others such as Deloitte were retained roughly two
calendar years ago and will not fall into the recusal period,
according to one person familiar with White's work at Deloitte.
Still, White could face questions, including from some
Democrats, about this work for big banking clients and the
so-called "revolving door" between Wall Street and regulatory