WASHINGTON -- Consuela Washington, a longtime securities aide to Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, is being increasingly mentioned as the top contender to chair the Securities and Exchange Commission.

Although President-elect Bill Clinton's transition team has just started searching for a replacement for SEC Chairman Richard Breeden, a Republican whose five-year term ends this spring, SEC watchers say Washington appears to be the leading candidate.

A spokesman for the Clinton transition office would not comment yesterday.

Washington, 44, served for three years as an attorney adviser and then special counsel in the SEC's corporate finance division before joining Dingell's committee staff in November 1979. She is considered the top contender both because she is regarded as having an excellent knowledge of securities regulation and because she fits Clinton's promise to pick top officials who will represent a cross-section of the American population.

Besides being a woman, Washington is black.

A graduate of Harvard Law School, Washington was an associate with the Chicago law firm of Kirkland & Ellis and was a member of the corporate law department of Allis Chalmers Corp. in the early 1970s, before joining the SEC in 1976.

Also being mentioned as a possible successor to Breeden is SEC Commissioner Mary Schapiro, a lawyer who was formerly a futures industry lobbyist and executive assistant to the chairperson of the Commodity Futures Trading Commission. She is the only woman on the five-member panel and its only political independent.

A prominent market official also being mentioned by SEC watchers is Stephen Hammerman, vice chairman and general counsel of Merrill Lunch & Co. and former official with the SEC's New York regional office. Also being mentioned is Nashville lawyer James Cheek, who has been active in the American Bar Association's federal securities section and is reportedly a longtine friend of Vice President-elect Al Gore.

Other names that have circulated for the post are SEC Commissioner Richard Roberts; Marc Lackritz, newly elected president of the Securities Industry Association; and Steven Harris, staff director and chief counsel for the Senate Banking Committee.

But "the hottest name ... is Consuela," one prominent market watcher said yesterday. "Without a doubt she is an absolutely topnotch expert expert in the field and she's got the experience. She's extraordinarily fair, but tough."

"Consuela, Consuela, Consuela!" chanted another well-placed source. "In addition to her being an obviously great choice for Clinton in terms of diversity, no one knows the commission better than she does. She's extremely principled, and tough."

The downside, said the source, "is that she does not have a lot of market experience. She has not actually been practicing securities law for a long time. But she's been writing it for a long time."

But Washington has some stiff competition, sources say. "Cheek is very tight with Gore and highly regarded," said one industry source.

SEC watchers warn, however, that it is too early to jump to conclusions, since the transition machinery for the SEC, headed by Capitol Hill aide Jennifer Hillman, is just gearing up in the wake of the first rounds of top cabinet appointments last week.

And assisting hillman on the SEC transition is a prominent public finance expert, Aida Alvarez, vice president for public finance at First Boston in San Francisco, who was active in the Clinton campaign on women's issues. Another member of the team is Michael Stein, financial analyst for the Senate Banking Committee.

Alvarez "is active in new business development with a focus on infrastructure financings, particularly in California, the Southwest, and the state of New York," according to her resume." Aida is a senior banker on First Boston's state of California accounts, and she is also a senior member of the teams that lead-manage transactions for San Antonio's Public Utility, City Public Service, and New York's Metropolitan Transportion Authority."

SEC Chairman Richard Breeden's five-year term at the agency is not up until June, and he has not said whether he will step down by Inauguration Day, Jan. 20. Most Bush administration appointees are expected to depart or hand in their resignations on that date.

Joseph Hardiman, chairman of the National Association of Securities Dealers, told reporters yesterday, "I don't think the current chairman will announce his resignation until his successor is appointed.

"I don't think he will necessarily step down on Jan. 20 if a new chairman hasn't been appointed, either an acting chairman or a permanent chairman," said Hardiman, who listed Washington, Cheek, Schapiro, and Hammerman as the candidates he has heard most frequently mentioned for the SEC post.

"Breeden's term runs until June 5. There has been precedent in the past for chairmen of the outgoing party to remain until their successor has been appointed. And my surmise is that Richard will stay on board as chairman until his successor is appointed," Hardiman said.

"Obviously, we all hear of Consuela as being a candidate," Hardiman told reporters. "I hear about a fellow named Jim Cheek who is a very prominent securities lawyer in Nashville. He's a very able securities lawyer, close to the Gore camp. Certainly a very able guy.

"I hear that Mary Schapiro may be considered," he added. "She certainly is experienced. And while she is not a Democrat, she is an independent, and I think would do a good job."

Said one Washington source, "I've got to believe that they will have someone soon.

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