Obama vows his commerce team will 'crack down'

Scott Olson/Getty ImagesMary Schapiro, head of the Financial Industry Regulatory Authority, was nominated yesterday by Barack Obama in Chicago to lead the Securities and Exchange Commission. She called the trust of investors ''the lifeblood of financial markets.'' (Scott Olson/Getty Images)

CHICAGO - Nearing completion of his Cabinet, President-elect Barack Obama has selected US Representative Hilda Solis of California as his labor secretary and former Dallas mayor Ron Kirk as US trade representative, officials said yesterday.

Obama planned to formally announce those selections as soon as today along with that of US Representative Ray LaHood, Republican of Illinois, for transportation secretary.

Democratic officials also said Dennis Blair, a retired admiral and the former head of US Pacific Command, is a leading contender to become director of national intelligence.

Yesterday, Obama named three veteran regulators to help clean up financial debacles. Amid a year-old recession that is still deepening, Obama blamed much of the nation's economic troubles on government regulators who "dropped the ball," and he called for a return to ethics and tough enforcement.

The officials who talked about the selections spoke on the condition of anonymity because they were not authorized to discuss positions that have not yet been announced.

Solis, a Democratic congresswoman who is the daughter of Mexican and Nicaraguan immigrants, has focused on immigration and environment issues while in the House. Kirk, a partner in the Dallas office of the Houston-based powerhouse law and lobbying firm Vinson & Elkins, was the first black person elected mayor of Dallas.

Obama is trying to get most of his major appointments out of the way before heading to Hawaii for a holiday vacation, and has held a news conference each day this week to unveil top positions. He has yet to announce senior intelligence positions, and numerous sub-Cabinet posts remain unfilled.

Standing before reporters yesterday, Obama named Securities and Exchange Commission veteran Mary Schapiro as chairwoman of that agency, former Treasury official Gary Gensler to head the Commodity Futures Trading Commission, and law professor Daniel Tarullo to fill an empty Federal Reserve seat. All three will need to be confirmed by the Senate next year.

In making the announcements, Obama pointed to Wall Street money manager Bernard Madoff, under investigation in an alleged $50 billion fraud, and said the scandal underscored the need for tougher regulators. The scandal "has reminded us yet again of how badly reform is needed," he said.

The president-elect said his new team will help put in place rules that will help "crack down on the culture of greed and scheming."

"There needs to be a shift in ethics on Wall Street," he said.

As Obama spoke in Chicago, the White House said it is considering "orderly" bankruptcy as a way of dealing with the desperately ailing US auto industry. President Bush, asked about an auto rescue plan during an appearance before a private group, said he had not decided what he would do but spoke of the idea of bankruptcies organized by the federal government as a possible way to go.

Obama did not immediately comment on the idea. He also declined to say whether he would support a decision by Treasury Secretary Henry Paulson to tap the second $350 billion installment of the $700 billion financial bailout program. Major auto companies are pleading for emergency aid, which could come from that fund.

"I think it's important that the Treasury, the Fed, and all of us do whatever's required to make sure that our financial system is stable and secure," Obama said. But he added: "We cannot afford a collapse of our financial system. Main Street can't afford it." He said he would evaluate any Paulson signals about what is necessary.

More broadly, Obama blamed regulators for the financial debacle, saying that they, along with congressional committees, "have been asleep at the switch."

Americans, as they watch their investments tank, are frustrated that "there's not a lot of adult supervision out there," Obama added.

Schapiro, who would be Obama's top Wall Street regulator and investor protector, said investor trust "is the lifeblood of financial markets." She called for tough enforcement action by incoming regulators.