The Securities and Exchange Commission confirmed Thursday that it hired a managing director of Wall Street titan Goldman Sachs Inc. to serve as chief of staff, prompting critics to decry a revolving door that links the corridors of finance and power.
Chairman Mary Jo White has hired Andrew “Buddy” Donohue, the SEC said in a news release, tapping the influential Wall Streeter to become chief of staff of the agency in charge of protecting investors. He’ll serve as a senior adviser to White on policy, management, and regulatory issues.
Most recently, Donohue worked as a managing director and associate general counsel at Goldman Sachs. Previously, he led the SEC's Investment Management Division between May 2006 and November 2010, spanning two administrations and the worst financial crisis since the Great Depression.
“I am thrilled that Buddy will be returning to the SEC to provide his extensive knowledge and expertise to the agency,” said SEC chief White said in a statement. “Buddy is a seasoned professional whose previous SEC and private sector experience will be invaluable in advancing all aspects of the agency’s mission.”
White said Donohue’s background will be “especially useful” as the commission advances new rules for risk management and weighs a uniform fiduciary standard for the investment community.
Wall Street critics were livid that yet another high-ranking Goldman Sachs leader got a top government position.
“The revolving door and the pernicious outsized influence Wall Street has over elected officials, policy makers, and regulators are seriously eroding the trust and confidence of the American people in its own government and democracy itself,” said Dennis Kelleher, president of the advocacy group Better Markets. “This hire will only feed that cynicism. After all, this simply is not the only well-qualified person from among 320 million Americans for such an important high government position.”
Adding insult to injury, he said, Donohue worked at the SEC at a time when the regulator had a soft touch before the 2008 financial crisis that nearly brought down the global financial system. Several insider accounts of the early days of the financial crisis were critical of then-SEC Chief Christopher Cox, for whom Donohue worked.