WASHINGTON -- Arthur Levitt Jr., President Clinton's nominee to become chairman of the Securities and Exchange Commission, sailed through his Senate confirmation hearings yesterday without being asked any questions about controversial issues facing the municipal market.
But Levitt will be queried on whether tax-exempts need additional regulation in written questions that the Senate Banking Committee is scheduled to send him this week, a panel aide said.
The questions may range from whether Levitt thinks bond firms should be prohibited from giving campaign contributions to state and local officials who award bond underwriting contracts to whether municipal issuers should be required to provide greater disclosure to the secondary market.
The committee is tentatively scheduled to vote July 22 on Levitt's nomination, and Capitol Hill sources said yesterday they see no major obstacles to his being confirmed.
Levitt told panel chairman Donald Riegle, D-Mich., that his first goal as SEC chief would be to ensure "vigilant enforcement" of sound regulations. He said he also hopes to "nurture a climate" that encourages capital creation.
Levitt called the growing market for derivative products a "moving target" that should be carefully monitored, particularly since he is not convinced that all investors "truly understand" what it is they are buying. He said regulatory mechanisms that deal with the market need to be coordinated, but that he is awaiting the findings of an interagency study on the products before making any recommendations.
The former head of the American Stock Exchange, Levitt chairs the New York City Economic Development Corp. and heads a New York City-based publishing firm, Levitt Media Co. His father, Arthur Levitt Sr., was New York State comptroller for a number of years.
Levitt, who was nominated on April 28 to succeed Richard Breeden as the head of the SEC, said in a written statement detailing his investment holdings that he intends to divest himself of his holdings in roughly 50 securities. But he said he plans to retain his U.S. Treasury notes and his investments in state and local government securities. The form did not disclose the amount or name of the bonds.
The nominee also has been chairman of the Special Advisory Task Force on Future Development of the West Side of Manhattan and chairman of the Mayor of New York's Management Advisory Task Force Committee on Incentives and Tax Policy.