GOVERNMENT: SEC & the Holding Company

After turning up all sorts of skulduggery in the RFC, Congress last week pointed an accusing finger at SEC as well. Charged a House Judiciary subcommittee: SEC had given special and favored treatment to United Corp., a $38.7 million public-utility holding company, and ex-SEC officials had moved into five top jobs in the company.

“A curious and sudden shift,” says the committee staff’s report, developed in SEC’s attitude toward United the same year (1943) that William M. Hickey, ex-assistant chief of SEC’s utilities section (which he left in 1936), became president of United. Instead of dissolving United, as it had done to 73 other public-utility holding companies, under the “death sentence” law, SEC spared the company. Other top United executives who were once SECmen: Vice President E. Carey Kennedy, former SEC analyst; Edward Roll, also an SEC analyst, now assistant to United’s president; Harry G. Slater, who switched from chief counsel of SEC’s public-utilities division to assistant general counsel of United’s top subsidiary, Niagara Mohawk Power Co.; John J. Burns, counsel to SEC, who now has the same type of job at United.

Says the report: it is fair to conclude from these facts that former SEC officials are now and have been for some time in control of the United Corp. SEC called the charges “ridiculous” because, it said, they had first been advanced by a dissatisfied United stockholder. But Pennsylvania Democrat Francis E. Walter, chairman of the subcommittee, will probably do more than follow the staff’s recommendation that he investigate SEC’s dealings with United. He is expected to take a hard look at all SEC operations.