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Washington, D.C.—President Bush’s call for $100 million in additional funding for the Securities & Exchange Commission (SEC) in the next fiscal year won’t, by itself, successfully strengthen this key regulatory agency to the point where it can help restore investor confidence in America’s public companies, the head of the union representing more than 2,000 SEC employees said today.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) called the Bush proposal, made in a New York speech today, “an insufficient step” in addressing the agency’s needs—and she took particular note of the president’s failure to propose any additional funding to implement the pay parity legislation approved by Congress earlier this year.

“The problems the SEC is having in helping restore investor confidence in our securities markets cannot and will not be addressed successfully unless and until this administration focuses on the problems the agency itself is having,” President Kelley said.

“Everyone knows the SEC is undergoing severe recruitment and retention problems,” she said. “That’s what the pay parity legislation is designed to address. Yet, by largely ignoring the need for true pay parity for SEC employees, the administration continues to skirt the real issue.”

In his New York speech, which centered on the need for greater responsibility on the part of public corporations, President Bush called on Congress to provide an additional $100 million to the SEC in fiscal year

2003 to hire more enforcement officers and improve technology. The administration’s budget proposal earlier this year called for essentially flat spending of about $467 million by the SEC in the coming fiscal year.

While the additional resources are welcome, President Kelley said, without funding for pay parity, they would do “absolutely nothing to stem the exodus” of talented attorneys, accountants and other professionals—all of whom are key to SEC enforcement activities—nor to attract the brightest young people into long-term service at the SEC.

“Given the importance of the SEC, particularly in light of the obvious ethical problems in both the corporate and accounting sectors of our economy,” President Kelley said, “the nation can hardly afford to have the SEC serve as a training ground either for the private sector, or for other federal financial regulatory agencies” where pay is often much higher than at the SEC.

“Securities fraud is not prevented by having a different cop on the beat every day. Until the revolving door at the SEC is closed, we will not be able to restore investor confidence,” the NTEU leader added.

Kelley said NTEU supports legislation offered by Sen. Paul Sarbanes that would authorize $776 million for the SEC in fiscal 2003—including $102.7 million for pay parity, $108.4 million for technology improvements and $98 million in additional staff.

S. 2673, the Public Accounting Reform and Investor Protection Act, currently is under debate in the Senate. Kelley noted that the House Financial Services Committee has already approved legislation to authorize the same total for the SEC—$776 million.

NTEU is the largest independent federal union, representing some 150,000 employees in 25 agencies and departments.