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Bush Taps Investment Banker to Head SEC as Part of New Economic Team - 2002-12-10

President Bush has chosen another new member for his economic team, nominating a New York investment banker to head the Securities and Exchange Commission. The decision comes a day after the president announced his choice for a new Treasury Secretary.

President Bush said investment banker William Donaldson will help protect the health of the U.S. economy by making sure all investors have fair and accurate information. "Bill Donaldson will be a strong leader with a clear mission to vigorously enforce our nation's laws against corporate corruption and to uphold the highest standards of integrity in the securities markets," Mr. Bush said.

If confirmed by the Senate, Mr. Donaldson would replace Harvey Pitt, who resigned last month after a series of misteps fueled criticism that the president's team was not dealing seriously enough with a wave of corporate accounting scandals.

Announcing Mr. Donaldson's nomination, President Bush said the future of the U.S. economy depends heavily on the honesty of American business and the integrity of the securities markets.

He said he chose the 71-year-old former chairman of the New York Stock Exchange because he is a man who sees business as a calling that demands "the highest standards of integrity."

Mr. Donaldson said he is committed to restoring investor confidence. "Confidence in the U.S. corporate and financial industries has been seriously eroded during the past few years. Restoring the confidence of investors and the integrity of the markets is the responsibility of all of us," he said. Mr. Donaldson is the co-founder of a Wall Street investment banking firm and former dean of Yale University's Graduate School of Management. The Marine Corps veteran was also a U.S. undersecretary of state in the 1970s.

His nomination comes a day after President Bush nominated railroad executive John Snow to replace outgoing Treasury Secretary Paul O'Neill.

Mr. O'Neill resigned under pressure last week along with White House Economic Advisor Larry Lindsey. Mr. Lindsey's replacement has not been named. Financial analysts predict a shakeup in the president's economic team could restore investor confidence and blunt criticism that the administration is not paying close enough attention to the nation's sluggish economic recovery.

The president is promising a new economic package built around further tax cuts which the administration says could cost up to $300 billion over ten years.