Harvey L. Pitt Remarks Upon Receiving
The 19th Annual William O. Douglas Award
(Feb. 4, 2011)
A gracious good evening!
I’m grateful to ASECA and its Board for this recognition, and to all of you for helping me celebrate. I want to thank Chairman Schapiro for her generous introduction which, fortunately for me, wasn’t subject to the same accuracy standards she and her colleagues apply to those they regulate! I’ll have more to say about Mary and the Commission shortly, but her willingness to give the introduction makes this special award even more special.
The worst mistake an award recipient can make is to assume that he or she actually deserves the acclaim that accompanies a particular award. I harbor no such illusions. Indeed, Billie Jean King may well have had me in mind when she coined her “First Rule of Recognition”—namely, that “you never get recognition when you want it, and then when it does come, you get too much.” That makes it daunting to stand before this aggregation of SEC alums and securities law experts to accept an award that easily could have been given to many others. Billie Jean King’s First Rule of Recognition also brings to mind two anecdotes that bracketed the beginning and end of my tenure as SEC Chair. I’d like to share both with you.
After becoming SEC Chair, I was incredibly eager to get started, and on my first workday, I dutifully went to the bowels of 450 Fifth Street, where my photo was taken and I was given my official SEC ID. It was a proud moment for me, until I looked closely at the card and saw that, over the line “Chairman,” my ID had been signed by . . . Arthur Levitt! When I gently inquired “who’s the SEC’s Chairman?,” the genial staffer ushering me through the process gasped, and immediately issued me a new ID, one that replaced Arthur’s signature as Chairman with my own. Although an effort was made to reclaim the original ID, I declined to part with it. Indeed, I still have it today as a treasured memento of my first day as SEC Chairman.
The second incident occurred near the end of my tenure as Chairman. The White House asked if I would help my old friend and former client, Bill Donaldson, get up to speed for his confirmation hearings. Bill and I agreed to meet away from prying eyes, and convened at my home. After a productive two-hour session, I offered to drive Bill to the airport, and he graciously accepted. When we got to my car, I slid in to the driver’s seat, while Bill—preoccupied with flight schedules and all he had to do in coming weeks—instinctively eased into the back seat! I turned toward the back seat and, as if on cue, we both paused for a second, and exchanged surprised glances. Although I assured Bill I didn’t mind driving to the airport with him in the back seat, he hastily repaired to the front!
To me, these bookend vignettes are metaphors for an important truth all SEC alums share—during our service at the SEC, we have the chance to add luster to the agency’s storied history. But, we shouldn’t lose sight of the fact that, at the SEC, everyone—except perhaps for William O. Douglas—followed others who made impressive and important contributions before we got there, and we’ve all preceded others who’ve done, or will do, even grander things than those we aspired to do, or actually did, during our tenures.
ASECA brings together a diverse group of people who have an important attribute in common—a shared appreciation for the SEC’s important role—and who reflect the dedicated service so many have given unstintingly to the agency whose mission is to protect and foster American capitalism. Apart from giving us an excuse to get together, renew our shared heritage, and tell stories about the “good old” days, ASECA provides meaningful scholarship assistance to deserving young people, some of whom will undoubtedly form the pool from which future William O. Douglas Award winners will come. And, as gratifying as this award is in its own right, I’m also pleased that my selection coincides with the beginning of my friend, Amy Goodman’s, tenure as ASECA’s new President.
There are seven former Douglas Award winners here tonight, including the very first honoree, Irv Pollack, and two present or former SEC Chairs, Chairman Schapiro, and former Chairman Ruder. I’m honored to join their ranks. But, I’d be remiss if I didn’t say a word at the outset about the 2nd recipient of the William O. Douglas Award—my dear friend, longtime SEC colleague, and now my next-floor business neighbor, the Honorable Stanley Sporkin. Putting to one side Stan’s poor judgment reflected by his single-minded pursuit of my receipt of this award, Stan’s a dear friend, with a marvelously creative mind, and is a pillar of integrity. He sets the bar high for the rest of us to emulate, but we all do well to try and emulate Stan. So, thank you Stanley and, even though I know it’s a few days early, Happy Birthday!
I was asked to try to keep my remarks brief. Those who know me, however, know that’s like asking the Washington Redskins to exhibit patience, and develop a winning team by making sound draft picks, rather than signing flashy, egotistical, over-the-hill, big name free agents—not in this lifetime! But, I recognize that many here would like to catch up with friends, while others are either three sheets to the wind, or would like to be. So, I thought that, instead of offering my usual top ten observations, I’d make three simple points for your consideration:
• First, even though the Douglas Award is given to a single individual each year, it actually celebrates the fact that every recipient of this recognition has had the good fortune of working alongside several thousand talented men and women. The SEC has attracted wonderful people throughout its nearly eighty years, and there aren’t any individual achievements; they’re all collective.
• Second, it should trouble us, both as citizens and SEC alums, that, but for Chairman Schapiro’s leadership, and the efforts of the current Commission and its staff, the agency literally was on the brink of extinction. We shouldn’t pass lightly over how, under Mary’s able leadership, the Commission has restored its credibility, reputation and effectiveness, both in fact and in the public’s perception. Those of us who care about the agency owe Mary and her colleagues an enormous debt of gratitude. My concern, however, is that the Commission’s reputation and stature were reduced to such a state at all, especially since those who toiled at the Commission while its reputation was being denigrated were bright, hard-working and full of integrity. True, on occasion mistakes have occurred, but that’s true of all human endeavors, and always will be, not just at the Commission, but at every organization. What’s different was that the Commission has been utilized as an institutional piñata, bashed by politicians, editorial writers and others with their own agendas—agendas that relate to many things, but never to the public interest.
• My third, and last, point is that, unfortunately, the bashing hasn’t ceased, and those with their own agendas continue to criticize the Commission, almost always unfairly. For every problem or crisis the SEC confronts, the world divides into two groups—a relatively small number of folks who genuinely want to help the SEC solve a particular problem, and a surfeit of those who seek to use the problem for their own advantage. We can’t control the finger-pointers or advantage-takers, but we can control ourselves. That’s why I encourage all of us to support our former agency’s efforts to fulfill its critical mission. This doesn’t mean we have to agree with whatever the Commission proposes or does. But, it is possible for us to disagree with the SEC, not just civilly, but also constructively and respectfully. If the Commission seems headed down the wrong path, give it the benefit of your insights, which should include alternatives, but don’t impugn its motives or attack individuals. Those who attack the SEC and the dedicated staff it continues to attract, jeopardize our common background. If we don’t stand up for our former agency, who will?
Our public support for the agency is especially important because the Commission is facing what may be its most serious challenge—implementing Dodd-Frank’s directives. When Sarbanes-Oxley was passed, it seemed the Commission had been given an almost impossible challenge—we had a dozen rules and four studies to complete in an incredibly short amount of time. Each of the Commissioners and the staff worked diligently round the clock, and we met every deadline, unanimously. That was a walk in the park, however, compared to the 100 rules and 20 studies the Commission must complete under Dodd-Frank. And, mere numbers don’t begin to tell the real story. The Commission’s tasks, after all the rules are written and studies performed, are even more daunting, and carry the seeds for future criticism. Don’t misunderstand me—I’m confident this Commission is up to the task. But, we’ve seen—and continue to see—the Commission criticized either when it acts or if it doesn’t. It’s up to us—SEC alums—to come up with constructive ideas, and support the agency’s good faith efforts, even if they depart from our view of the perfect solution.
* * *
I’d like to close on a personal note. I started my legal career as a staff attorney at the SEC 43 years ago, in 1968, right out of law school, and it was at the Commission where I truly learned to be a lawyer. I was given an incomparable opportunity to serve as its General Counsel—although unlike one of my successors, the Commission wisely believed that one tour of duty as GC by me was more than enough! A quarter century later, I was honored to serve as SEC Chairman. I wouldn’t trade one second of my two tours of duty at the Commission for anything. I’ve met and worked with many able, talented and wonderful people, who made the experience of being at the SEC even more rewarding, many of whom are here tonight.
This award and this evening are thus incredibly meaningful to me, because they reflect the recognition of all of you—my past and current colleagues, as well as my family—and that’s recognition it’s always gratifying to receive. As in every aspect of my life, my lasting gratitude goes to my wonderful wife, Saree, and my fabulous children, now numbering five, three of whom—Emily, Madeleine and Jonathan—are here tonight. Through good times and bad, they support my efforts, don’t harp on my many foibles—well, not too much—and comfort me in the face of difficulties. That, of course, is the most wonderful recognition of all, the kind you always want to receive, and a gift that keeps on giving.