The Rachel Maddow Show | January 25, 2013
>>> it's not enough to change the law. we also need cops on the beat to enforce the law. and that's why today i am nominating mary jo white to lead the securities and exchange commission . over a decade as a u.s. attorney in new york , she helped prosecute white collar criminals and money launderers . in the early 1990s , she brought down john gotti , the head of the gambino crime syndicate . and she brought to justice the terrorists who are responsible for bombing the world trade center and the american embassies in africa. so i'd say that's a pretty good run. you don't want to mess with mary jo .
>> you don't want to mess with mary jo if you are a terrorist or a mobster. but if you are the ceo of bank of america , or if you're jpmorgan chase , mary jo white has not been nearly as scary as she has been to those other different, very different types of bad guys . does president obama nominating mary jo white to be the top cop of wall street at the s.e.c. mean that we're going to get a new tough cop on wall street , or does this mean that wall street is still being trusted to police itself? the person i most want to ask about this is the former new york governor and new york attorney general who earned himself the nickname the sheriff of wall street while he was in office. he of course is eliot spitzer . governor, thank you for being here.
>> my pleasure. and it's a joy to be here on the set with you. thank you.
>> mary jo white spent the last two years defending jpmorgan chase in cases that dated back to the bank's behavior during the financial crisis .
>> now she is slated to run the agency whose job it would be to investigate jpmorgan chase if the bank were breaking the law . that really sounds like a problem to me.
>> it sounds like a problem. and to answer your question, are the ceos thrilled or terrified? the answer is both. because we don't know until we watch what she does whether she has internalized the defenses she made on their and a half. what i mean by that, she is tough. the president is right. she brought down john gotti , she brought down terrorists. she knows how to use the law in a creative, aggressive way. the question is over the years representing the ken lewises of the world, the ceo of bank of america , has she begun to believe her own rhetoric? that's what happened to harvey pitt . harvey pitt , former chairman of the s.e.c. , a disaster. he first came in and said i want the kinder, gentler s.e.c. he destroyed the place. mary jo has the capacity to step up to the plate and show us that she can turn that broken agency around. here interest three metrics that i think we judge her by. one, what cases does she bring and bring quickly? use the clayton documents which showed the knowledge within the banks of the corruption of what they were doing about the underlying mortgages, use those documents to make structural cases. two, seek remedies that go way beyond money. reorganize the banks and is the way they do business. remedies has been the problem of the s.e.c. , even when they prove guilt, they say pass a little money and we go away. that's not enough. and three, the rule-making capacity. and i don't just mean rules about how they issue their proxy statements. i mean rules that empower shareholders to finally run the companies on the behalf of shareholders, not on behalf of the ceos . those are the three different metrics i'm looking for.
>> two questions about her which i think you know the answer to. one is her organizational capacity.
>> it's not that she is out there, arguing, litigating every single case out of the s.e.c. you need to be able to run the agency.
>> two, her understanding of the implications, the moral implications and legal implications of complex financial doings. is she capable over doing it?
>> look, she is as smart as you will find anybody to be. she understands all of this. i've been on panels with her. we have sometimes jousted with remedies because she was still representing these guys. but she gets it. and i think if she takes that enormous innate talent she's got to understand what these companies did to the markets and to the economy that we depend upon, she can be a remarkable force at the s.e.c.
>> i don't mean raw intellectual power. does she have the technical understanding of what they're doing? these people have counted on people not understanding their business.
>> shes that the capacity to understand it the way anybody that smart would. at a deeper level, she doesn't make the cases individually. she doesn't sit behind the desk and say i'm going to invest a, b or c. she has to infuse the organization with the energy, the creativity, the spirit and bring into the organization the people who can do it. a lot of people say revolving door . she comes from the other side of the aisle. revolving door is a bet metaphor than diagnosis. and what i mean by that, we all love the imagery of the revolving door as a major problem. some of the real dead wood at the s.e.c. are folks who have been there forever. they've never been in the private sector, and likewise, some of the best people who have reformed our financial markets like gary genzler came from goldman. so it's not so much where you came from, it's what's up here. in other words, do you have the energy and independence to break with wherever you have been to say this has got to change.
>> don't you think the incentive change of the revolving door metaphor, though, makes sense.
>> that people who are not at the top of the agency, but the agency may be thinking, you know what? i would love you guys to hire me maybe, later, i want you to have positive associations with me when i give you my resume.
>> absolutely, but mary jo doesn't respond to that, first, i don't mean to pass judgment. she is independently wealthy, her husband is very successful as a lawyer. money is not what drives mary jo , she values the integrity. not to say necessarily she is going to be good. but as i said a couple of moments ago she brings the cases, seeks the remedies and changes the rules to empower shareholders, she has the intellect and capacity to do it. we'll have to wait and see. that is why being agnostic about what we think is the better approach. and the ceos having a drink tonight, saying i don't know if i should be happy or terrified, in answer to your question.
>> so they should have one, not ten, to get their act together in case she is coming after them.
>> i would rather not be drinking at all, when they get drunk, they do dangerous things to the economy. we'll keep them sober.
>> former attorney general, and eliot spitzer , it has been too long since we saw you here. i know you had been doing weird stuff.
>> i was on a tv show .
>> great to see you, sir.
>> thank you.
>>> i am sorry to say, there is reporting in respected corners of the news media tonight that seems to me like bullpucky, maybe i'm wrong, but maybe it is time to call bullpucky on tv with the siren and everything.