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McCain says he would fire SEC head Christopher Cox

COMBINED NEWS SERVICES

September 19, 2008

CEDAR RAPIDS, Iowa - Republican John McCain, buffeted by criticism about his response to Wall Street's financial problems, said yesterday he would fire the SEC chairman and create a special trust to help strengthen weak institutions.

In all but calling for the firing of Securities and Exchange Commission Chairman Christopher Cox, McCain turned on a fellow Republican and former 17-year House member who served on committees overseeing investor protection and U.S. capital markets.

Speaking at a rally in an airplane hangar in Cedar Rapids, McCain said the SEC, the primary regulator of Wall Street, had let "speculators and hedge funds turn our markets into a casino."

"The chairman of the SEC serves at the appointment of the president and, in my view, has betrayed the public trust," McCain said. "If I were president today, I would fire him."

Cox was appointed SEC chairman by President George W. Bush in 2005. The president cannot fire the SEC chairman - in the past chairmen have resigned under White House pressure; the McCain campaign later said that the candidate was speaking colloquially.

Cox issued a statement rejecting McCain's call, saying it would be a mistake to change leadership at the commission amid a financial crisis. "Now is not the time for those of us in the trenches to be distracted by the ebb and flow of the current election campaign," Cox, 55, said.

"While I have great respect for Senator McCain, we have sometimes disagreed, and this is one such occasion," Cox said in the statement that outlined steps the agency has taken to deal with the current difficulties.

It's not the first time the head of the SEC has drawn McCain's fire. Six years ago McCain called for the firing of Harvey Pitt, Bush's first SEC chairman, after accounting scandals at Enron Corp. and WorldCom Inc. Pitt announced his resignation four months later. Yesterday, Pitt called McCain's remarks "a lot of sound and fury."

"The true mark of leadership is focusing on constructive solutions, rather than asserting blame," he said.

Cox said he's always been clear about his intent to leave the SEC when the Bush administration ends in January 2009. Cox's term officially ends in June 2009, but he could stay on until a successor is named.

McCain proposed creating a trust to review mortgage and financial institutions, identify weaker ones and strengthen them before insolvency. "Today we need a plan that doesn't wait until the system fails," he said. "For troubled institutions, this will provide an orderly process through which to identify bad loans and eventually sell them."

McCain's running mate, Alaska Gov. Sarah Palin, joined him in Cedar Rapids and drew some of the biggest cheers with her stump remarks. She fumbled a bit at the start when she said it was good to be in "Grand Rapids" - the Michigan city they'd just flown in from.

Their speeches were repeatedly interrupted by protesters who were dragged away screaming while the audience broke into chants of "USA." Afterward, McCain and Palin visited a flood-damaged area of Cedar Rapids.