Negroponte given power to waive SEC rules
Share Now on:
Negroponte given power to waive SEC rules
KAI RYSSDAL: Don’t know if you caught this in the papers this morning, but the Federal Communications Commission isn’t going to investigate the NSA. FCC Chairman Kevin Martin said his agency can’t look into the government’s domestic surveillance program because . . . it’s classified. The guy in charge of most of the classified stuff in this country is John Negroponte. He’s the National Director of Intelligence. And President Bush just gave him something else to do, too. Dawn Kopecki’s a correspondent for BusinessWeek. Dawn, what is that’s happened?
DAWN KOPECKI: The President just delegated authority to John Negroponte that allows him to exempt any publicly traded corporation that is working on national defense issues or national security issues from the reporting and accounting requirements under the 1934 Securities and Exchange Act. It’s basically the rules and regulations that require companies to keep accurate records, acurate books, accurate accounting . . . and then disclose those projects and that information to investors.
RYSSDAL: This authority, this power that the President has to do this is not necessarily new. It’s the use that you’ve uncovered.
KOPECKI: Well, we’re not actually sure whether or not it’s been used before. Every president since Jimmy Carter has had this authority. It was given to the president in 1977 in the Foreign Corruption Act. We don’t know whether or not it’s been used by the President, but what we do know, or what the White House told us, is that they don’t believe any president has ever delegated that authority to anyone outside of the Oval Office.
RYSSDAL: When the President signs memoranda like this, in most cases it has to be published in the Federal Register. I’m going to guess, though, that the subject heading in the Federal Register of how this was listed didn’t say “President lets John Negroponte decide what companies have to report their books. How did you find this story?
KOPECKI: I’ve covered a lot of different issues over the years in Washington, and one of them is securities laws. One of my securities sources knew that I was now covering defense issues and he called me up and said, “Hey, did you see this?” I knew that it was probably a little bit bigger than what the White House and other blogs and what-not had alluded to.
RYSSDAL: The memo that the President signed was dated May 5. Talk to me about the timing of this for a second.
KOPECKI: Well, May 5 is the day that Porter Goss stepped down from the CIA. It’s also six days before USA Today published its story that three major telephone companies had turned over massive amounts of customer calling records to the federal government, that the NSA was using to data-mine and look for patterns and, basically, spy on.
RYSSDAL: Now, if you play this out, conceivably what this rule now means is that AT&T and Bell South and Verizon, who have these government contracts — it’s been reported in the papers — have these government contracts to sell customer data to the government, they may never have to report that income or how the finances of that program worked.
KOPECKI: It’s true. That could be one possibility. The White House, when I asked them point-blank whether or not any company, including those telephone companies, had been given this waiver, they said no comment. Negroponte’s office hasn’t called me back since I sent them my questions two days ago. We really don’t know, and I believe, and what securities attorneys have told us, is we may never know because it doesn’t require anyone to disclose it to anyone outside the Senate and House intelligence committees.
RYSSDAL: Dawn Kopecki’s a Washington correspondent for BusinessWeek magazine. Dawn, thanks so much for your time.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.