Mary Jo White Plays The Middle At The SEC

SEC Chair Mary Jo White made her name playing hardball as a prosecutor in New York, but it turns out she knows how to do it as a regulator in Washington, too.

In coming months, the SEC will vote on a raft of important post-crash rules on everything from money market funds and executive pay, to the $700 trillion swaps market and crowdfunding for startups. The commission’s four other members are divided on parts of these rules, with two Democrats facing off against two Republicans.

In search of a compromise, White has made clear to members of the commission she may vote with its two Republicans on some crowdfunding and swaps rules, sources familiar with the discussions tell TIME. It would be the first time White had crossed the aisle to deliver a 3-2 vote on regulation for the Republican side.

The move is a continuation of White’s savvy political play at the commission. “Her purposeful nonpartisanship has kept Washington’s political players guessing,” says former SEC commissioner Annette Nazareth. The result is increased clout for White, observers say.

Even before she arrived at the SEC a year ago, White showed a new openness to Republican concerns. During a pre-confirmation meeting on Capitol Hill a year ago, Sen. Mitch McConnell told White he vigorously opposed a measure her predecessors had put on the SEC agenda that would have required corporations to disclose their political contributions. In November, White removed the measure from the SEC’s agenda. “We were very disappointed,” says Lisa Gilbert, director of Public Citizen’s Congress Watch division, which has championed the issue. White later said the agenda had been stripped down to reflect what the SEC could reasonably expect to handle in the fiscal year.

After she arrived at the SEC, White played both sides of the aisle. Building on work by her predecessor, Elisse Walter, White broke a three year regulatory stalemate in June by moving a compromise rule proposal for money market funds that amalgamated approaches preferred by the left and the right.

White angered left-leaning regulators by opening up a public comment file on a much-criticized Treasury Department study on the systemic risk posed by big asset managers like Blackrock and Pimco. She has moved Republican mandated rules that loosen restrictions on business fundraising, to the dismay of Democrats at the commission and on the Hill.

But White has also helped deliver top priorities for the left in her first year. Working with Democratic commissioner Kara Stein, she toughened the long-delayed Volcker rule and moved it out of the commission on a 3-2 party-line vote over Republican opposition. “I met with the Chair and we walked through a detailed list of my suggestions—twice; once early on in the process and once later,” Stein says. “She learned each issue, and then exercised her judgment on whether she agreed with my approach or not.”

Even as White has indicated she may vote with the Republicans on parts of the swaps and crowdfunding rules, she also has indicated she’ll likely vote with the Democrats on executive pay restrictions. And as she continues to play both sides, fellow commissioners from both parties say positive things about her leadership.

GOP commissioner Daniel Gallagher says of White, “It’s bringing people into the process that she’s got a special knack for.” His fellow GOP commissioner Michael Piwowar says, “She’s very smart, very driven and very competitive.” And Democratic commissioner Kara Stein says, “Mary Jo’s reputation as an effective executive is well deserved.”

Not everyone is happy about how White is managing the politics of the commission. “There’s a risk that she’s running this commission with the two Republicans,” says one Senate Democratic aide familiar with the SEC deliberations. “We’re potentially seeing an SEC that on several issues is running contrary to the direction of the administration.”