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GOP assails SEC over staff’s use of porn sites

By Daniel Wagner
Associated Press / April 24, 2010

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WASHINGTON — Republicans are intensifying their criticism of the Securities and Exchange Commission after reports that senior agency staffers spent hours surfing pornographic websites on government-issued computers while they were supposed to be policing the nation’s financial system.

Representative Darrell Issa of California, the top Republican on the House Oversight and Government Reform Committee, said it was “disturbing that high-ranking officials within the SEC were spending more time looking at porn than taking action to help stave off the events that put our nation’s economy on the brink of collapse.’’

The SEC’s inspector general conducted 33 investigations of employees looking at explicit images in the past five years, according to a memo obtained by the Associated Press.

The memo says 31 of those inquiries occurred in the 2 1/2 years since the financial system teetered and nearly crashed.

The staffers’ behavior violated governmentwide ethics rules, it says.

SEC spokesman John Nester said in a statement yesterday that each of the offending employees has been disciplined or is in the process of being disciplined, and some have already been suspended or dismissed.

The memo was written by SEC Inspector General David Kotz in response to a request from Senator Charles Grassley of Iowa. It summarizes past inspector general investigations and reports some shocking findings:

■ A senior attorney at the SEC’s Washington headquarters spent up to eight hours a day looking at and downloading pornography. When he ran out of space on his computer’s hard drive, he burned the files to CDs or DVDs, which he kept around his office. He agreed to resign, an earlier watchdog report said.

■ An accountant was blocked more than 16,000 times in a month from visiting websites classified as “Sex’’ or “Pornography.’’ Yet he managed to amass a collection of “very graphic’’ material on his hard drive by using Google images to bypass the SEC’s internal filter, according to an earlier report from the inspector general. The accountant refused to testify in his defense, and received a 14-day suspension.

■ The number of cases jumped from two in 2007 to 16 in 2008. The cracks in the financial system emerged in mid-2007 and spread into full-blown panic by fall 2008.