One could almost hear a sigh of relief coming from those cavernous streets in lower Manhattan which comprise the financial center of the universe upon President Bush's nomination of William H. Donaldson as Securities and Exchange Commission chair.

The Wall Street insider and co-founder of Donaldson Lufkin & Jenrette, comes armed with formidable political and financial connections having toiled in the State Department under both the Nixon and Ford administrations and in addition to his spearheading the successful DJL, served as chairman of the New York Stock Exchange.

If nothing else, all reports indicated his pedigree includes far sharper diplomatic skills than his controversial predecessor, which is like saying that Shaquille O’Neal can dunk over Tattoo, the diminutive butler from Fantasy Island.

But, "buried beneath the lead" as we ink-stained wretches are fond of saying, was GWB’s sudden change of heart regarding additional budget funds for the beleaguered regulator.

In October, the powers that be at 1600 Pennsylvania authorized a budget of $568 million for the agency, which was roughly 27 percent less than had originally been requisitioned. Suddenly the 2004 SEC coffers have the potential to swell to over $800 million.

A tremendous show of Capitol Hill altruism to help restore investor faith?

Perhaps.

But is it a coincidence that the in the year the SEC is slated to hit the budget lottery, it just so happens that a Presidential election is on he docket? Strange how those things work. Had not so many key House and Senate races hinged on last month’s elections, would Sarbanes-Oxley have sailed through as easily as it did?

But that’s fodder for another discussion.

In any event it’s funding that the agency desperately needs. Not only for investigations, but also to recruit and retain qualified people. I mean what sane person would want to put in 80 hours a week for lower wages than most private sector posts would pay for half that grueling schedule?

Last week Rick Bayless of the SEC’s Division of enforcement told attendees at an auditing conference in New York that his division investigated some 504 cases in 2002, with about one-third of those centering on auditing fraud.

Now, I doubt there was anyone in that room who naively thought that the agency couldn’t have investigated and/or prosecuted more cases with increased resources — both budgetary and in human capital.

With Donaldson’s nomination and the promise of a windfall in their future budget, there appears to be a whiff of cautious optimism at the Commission.

Now it’s a matter of convincing the Senate that Donaldson’s the right man for the job to lead the agency.

Then it will be a matter of convincing the public.

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