Blunt InSecurities: Gov Using Review Commission for Power Grab

Tucked away in the final grafs of an otherwise quotidian Sunday Post-Dispatch story about the potential recommendations of the Missouri Government Review Commission is a nugget that begs for a closer examination. A deeper look exposes another in a long line of Matt Blunt’s attempts to misuse Missouri’s public trust for partisan and parochial gain.

The penultimate paragraph of Terry Ganey’s piece on the Commission’s report says that the Commission will consider:

“Creating a state Department of Finance Regulation and Professional Registration. It would combine the current Department of Insurance with state agencies that currently regulate financial institutions, professions and securities dealers.”

A glaring omission from that description, of course, is any mention of the governmental entities from which the “state agencies that currently regulate financial institutions, professions and securities dealers” will be torn in order to create the proposed new department.

A peek at the actual proposal under consideration by the Government Review Commission --which is constituted primarily of big Blunt campaign donors hand-picked by the Governor-- yields the unsurprising fact that the bulk of the authority transferred will go from Robin Carnahan’s elected Secretary of State office into a new department headed by a Blunt political appointee. In other words, the proposal is a blatant power grab by Matt Blunt, made with the intent of weakening the powers of a Democratic elected officer who does not share his flagrant disregard for investor protection and competent, independent governance.

As are most of the Blunt Administration’s misguided and malignant policy initiatives, this one is undergirded by the abuse of government to benefit the industries and individuals who have supported Blunt campaigns and who serve as paymasters to the hangers-on in the Blunt family.

One of the Blunt-driven changes before the Commission is the removal of the Division of Securities from the Secretary of State’s office and placement within the Department of Insurance (the name of which will then be changed). That attempt is a thinly veiled ruse designed to remove Blunt’s favored friends in the securities and investment industries from under the watchful regulatory eye of Robin Carnahan in favor of friendly Blunt-appointed regulators. Such a move would no doubt be welcomed (and perhaps was initiated?) by brokers like Waddell & Reed and Edward Jones who have already had to pay landmark settlements to Missouri investors because of Carnahan’s protective action.

Overt intervention by Blunt on behalf of brokers like Waddell & Reed should come as no surprise. Consider that, while Waddell & Reed was under investigation for ripping off Missouri seniors via variable annuity flim-flam schemes, they hired the firms of both the Governor’s brother Andy and his sister Amy to provide their legal defense. Nothing like putting the Gov’s family on the payroll to ensure that he’ll take action to bring about a favorable outcome.

And lo and behold, following the Blunt Co. hiring by Waddell & Reed, the Administration’s Department of Insurance actually intervened in the Secretary of State’s enforcement action against the securities brokerage. The Department of Insurance, led by Blunt flunkies Dale Finke and Doug Ommen, attempted to step in on behalf of Waddell & Reed and claim that the Secretary of State had no jurisdiction to regulate the securities being sold. Despite ham-handed interference by Blunt’s lackeys on behalf of his cronies, justice was served and Carnahan’s efforts to make investors whole came to fruition.

All this is to say that the Government Review Commission’s proposal to move securities regulation from the purview of the Secretary of State, where it has existed for more than 80 years, and into a new department run by a Blunt puppet is an incredibly bad idea.

In addition to the menu of conflict-of-interest arguments made by Blunt’s past anti-investor acts, there are quite a few other good reasons why the Commission ought not ratify the proposal. Carnahan has run an effective, efficient shop which has protected investors well. This proposal would slash away much of the independence that has allowed the Securities Division to look after the interests of Missourians with such fervor. Further, by electing Robin Carnahan to her office, Missourians stated unequivocally that she ought to be in charge of a range of duties which included regulation of securities. To remove some of those powers from her office now, against the will of the voters, would be decidedly counter-majoritarian and anti-democratic.

Blunt, as is his wont, is looking to “fix” a division which is working very well. We should speak loudly against allowing him to do so. Similarly, we should call on the press to investigate these proposals and their genesis more closely, rather than relegating them to the dark, dusty final grafs of long news stories. Missourians deserve better, all around.