What is the Inspector General of the SEC thinking? Recommending David Becker be investigated by the DOJ for fraud?
Not only is the recommendation absurd under the publicly disclosed facts, but it sends a deep chilling effect across Washington and among those who might consider pursuing a position in public service. I don’t know David Becker well, but I have friends who have worked closely with him. I understand him to be a person of the highest integrity. In this particular situation he seems to have acted in a manner that is exemplary, hardly meriting investigation and the expenditure of limited government resources.
The facts. David’s parents were Madoff investors, earning $1.5 million. They were not fund managers or insiders, they made money as unwittingly as the scheme’s victims lost it; there is no allegation they had any idea they were invested in a multi-billion dollar Ponzi scheme. They did not recruit others to the scheme. When they recently died, David and his brother stood to inherit the funds. But as General Counsel to the SEC he was right smack in the middle of the Madoff inquiry. Immediately aware of the potential conflict and an appearance of impropriety, he did the right thing. David alerted not one, not five, but seven officials at the SEC, including Chairwoman Shapiro. They cleared him to continue his work for the Commission, where he worked for no more than 10% of what he received in his work in private practice.
Notwithstanding his decision to immediately come clean, David is being investigated and it will cost him thousands to defend himself, not to mention the significant aggravation he and his family must endure. Can’t Inspector General Kotz find something better to do? The role of the Inspector General is to ensure compliance and ferret out impropriety, but here something is missing. Someone is abusing the process. My concern is not just for David Becker but for the thousands of high quality professionals who may pass on public service because it just ain’t worth it.