The President’s Authority Over the SEC Chair
From the D.C. Circuit’s majority opinion in Free Enterprise Fund v. Public Company Accounting Oversight Board (PCAOB), No. 07-CV-05127 (D.C. Cir. Aug. 22, 2008)
Members of the Commission, in turn, are appointed by the President with the advice and consent of the Senate and subject to removal by the President for cause; its chairman is selected by and serves at the pleasure of the President. (p. 3)
independent agencies such as the Commission by definition enjoy a degree of autonomy in conducting their affairs, including staffing and operations. Yet this independence is not without limits. In addition to the ability to appoint Commissioners, 15 U.S.C. § 78d(a), and remove them for cause, … which removal power the Supreme Court has interpreted broadly,[FN8] the President possesses significant additional levers of influence. Most obviously, by appointment of the Commission chairman, who serves at the pleasure of the President and often “dominate[s] commission policymaking,” the President can influence Commission policy and control who directs “the administrative side of commission business, select[s] most staff, set[s] budgetary policy, and as a consequence command[s] staff loyalties.” (pp.23-24)
FN8 The Supreme Court has held that the restrictions on the President’s removal of Commissioners for “inefficiency, neglect of duty, or malfeasance in office” are “very broad and … could sustain removal … for any number of actual or perceived transgressions.” (p. 24)
So, yes Virginia, the D.C. circuit agrees that the Executive has the authority to remove the SEC chair for cause. Is there cause to remove Cox?
-Frank
