Securities and Exchange Commission Historical Society

Regulating the Regulators: The Executive Branch and the SEC, 1981-2008

George H.W. Bush Administration

Breeden Commission

October 11, 1989 Richard Breeden and President George H.W. Bush

President George H.W. Bush, who had served as Reagan’s Vice President for eight years, had previously been a U.S. Representative from Texas, envoy to China, and Director of the Central Intelligence Agency, brought to the Oval Office deep prior experience and appreciation about how government worked.  Bush’s view of a “kinder and gentler government” would mesh with his commitment to conservative regulatory policies.  With the U.S. Securities and Exchange Commission, Bush would shape its work by handing its reins to Richard Breeden, who had proved himself an able colleague.

Breeden had previously served during Bush’s Vice Presidency and was appointed as one of Bush’s 12 Assistants to the President.  Bush selected Breeden to manage the rescue of the savings and loan industry.  Breeden coordinated the legislative effort to create the Resolution Trust Corporation, which bought the assets of failed savings and loan institutions, comprising nearly a third of all U.S. S&Ls, to keep the industry afloat.   Edward Fleischman noted, “Richard Breeden was a longtime assistant to the new President, and the guy who was credited with awakening every day and saying, ‘How can I get FIRREA (Financial Institutions Reform, Recovery and Enforcement Act of 1989) one step further down the road to passage in the Congress?’  That was very important to the President.  So the appointment of Richard as Chairman of the SEC was the selection they wanted.”39

Breeden was eager for the challenge.  In a memo to Chief of Staff John Sununu, Breeden stated his qualifications for the office, the challenges facing the SEC and his motivation for service: “The SEC has been generally slipping from its traditional position of preeminence among independent agencies, in part due to leadership problems at the top.  The vacancy of the Chairman and several of the Commissioners this year offers the opportunity to rejuvenate the entire Commission.  I would provide strong leadership, with support in the White House being seen as a major plus for the Commission.”40

Before Breeden took the oath as SEC Chairman, he requested a meeting with President Bush in the White House mess.  He recalled that “President Bush was confident in my judgment and my experience.  He said I always want you to be sure that you do what you think is right and not what you think is expedient, not what you think is easiest.”41  That trust and confidence would give Breeden the flexibility to run the SEC his way.

Breeden understood the markets and how excessive regulation could undermine the ability to raise capital.  His approach to regulation was pragmatic, and he worked to achieve consensus among staff.  Richard Roberts remembered, “Chairman Breeden – for a Republican, you wouldn’t think this – was a real strong protector of shareholder rights.”42

Breeden made a significant change to the work of the SEC when he determined that international affairs would move from the Division of Enforcement, and be established as a separate office, headed by Michael Mann.  That change was prescient in light of one of the least anticipated, but most significant events in the second half of the 20th century: the end of the Cold War.  The collapse of the Soviet Union opened up opportunity for economic freedom.  Up to then, the SEC had limited global reach.  When former communist countries asked the SEC for assistance developing their own style of market capitalism, Breeden put into practice what he referred to as “his Ph.D. in political leadership,” obtained from his service at the White House. The International Institute on Securities Market Development was Breeden’s brainchild.  The Institute provided the foundational training for many newly-freed free-market proponents, welcoming foreign officials who had little experience, but an immense appetite, to learn about the U.S. markets and their regulation. Institute graduates returned to their home countries, where, for half a century, no free markets existed, and began to construct their own free-market systems.   Michael Mann remembered that, “In every country, we went to, we would meet in the chairman’s office, and he would have the Institute diploma up on his wall, next to the authority granted by his government to be chairman.  I remember Arthur [Levitt] turned to me and saying, ‘The power of this is greater than one could ever have imagined.’  It changed the way the SEC was perceived also.”43

As SEC Chairman, Breeden understood that, while regulations were necessary, if they cost capital formation more than their general benefits, the SEC should not pursue them.  Business interests appreciated his pragmatism.  Pro-regulators found much to like in his willingness to expand SEC authority where fraud went unprosecuted.   Although characterized for personal brusqueness and a penchant to not just “pick his battles; he wanted to fight them all,” he exhibited considerable skill as Chairman. “Richard Breeden was chosen because he had been such a good friend of George H.W. Bush, he had done brilliant work for 41, he had been a good friend of Darman and Sununu and others in the White House, and Republicans on the Hill like Warren Rudman, not an easy task.  Not something you do if you lack personal sensitivity.  In other words, the characterization that Richard has the skin of an elephant runs out at some point.  He’s been pretty good at making people of very different kinds think he’s a valuable friend and ally.”44

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Related Museum Resources

Galleries

The Mechanics of Legislation: Congress, the SEC and Financial Regulation
The Imperial SEC? — Foreign Policy and the Internationalization of the Securities Markets, 1934-1990
The Center for Audit Quality Gallery on Corporate Governance

Papers

January 17, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
February 24, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
February 24, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
February 24, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
February 24, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
February 25, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
April 4, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
April 20, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
May 18, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
June 17, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
July 28, 1983
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
August 2, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 3, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 3, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 5, 1983
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
August 8, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 8, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 8, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 8, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 12, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 19, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
September 7, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
September 7, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
September 7, 1983
image pdf (Courtesy of George Bush Presidential Library and Museum)
January 11, 1984
image pdf (Courtesy of David B.H. Martin)
January 23, 1984
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
March 8, 1984
image pdf (Courtesy of George Bush Presidential Library and Museum)
April 25, 1984
image pdf (Courtesy of George Bush Presidential Library and Museum)
April 26, 1984
image pdf (Courtesy of George Bush Presidential Library and Museum)
June 21, 1984
image pdf (Courtesy of the Ronald Reagan Library)
June 26, 1984
image pdf (Courtesy of George Bush Presidential Library and Museum)
June 28, 1984
image pdf (Courtesy of the Ronald Reagan Library)
July 19, 1984
image pdf (Courtesy of the Ronald Reagan Library)
July 20, 1984
image pdf (Courtesy of the Ronald Reagan Library)
July 24, 1984
image pdf (Courtesy of the Ronald Reagan Library)
August 27, 1984
image pdf (Courtesy of the Ronald Reagan Library)
August 31, 1984
image pdf (Courtesy of the Ronald Reagan Library)
November 25, 1986
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
January 8, 1987
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
February 12, 1987
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
March 19, 1987
image pdf (Courtesy of George Bush Presidential Library and Museum)
January 16, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
February 6, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
March 15, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
March 28, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
April 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
May 5, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
May 12, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
July 6, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
July 21, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 8, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
August 28, 1989
image pdf (Courtesy of George Bush Presidential Library and Museum)
December 20, 1989
transcript pdf (Anonymous)
January 17, 1990
image pdf (Courtesy of National Archives and Records Administration)
February 21, 1990
image pdf (Courtesy of National Archives and Records Administration)
March 14, 1990
image pdf (Courtesy of National Archives and Records Administration)
April 19, 1990
transcript pdf (Anonymous)
May 2, 1990
transcript pdf (Courtesy of David S. Ruder)
May 8, 1990
image pdf (Anonymous)
May 8, 1990
image pdf (Anonymous)
May 24, 1990
image pdf (Courtesy of David S. Ruder)
May 24, 1990
image pdf (Courtesy of David S. Ruder)
May 24, 1990
image pdf (Courtesy of David S. Ruder)
May 25, 1990
image pdf (Courtesy of George Bush Presidential Library and Museum)
May 29, 1990
image pdf (Courtesy of George Bush Presidential Library and Museum)
June 22, 1990
image pdf (Government Records)
September 10, 1990
image pdf (Courtesy of George Bush Presidential Library and Museum)
September 20, 1990
image pdf (Courtesy of David B.H. Martin)
October 12, 1990
image pdf (Courtesy of George Bush Presidential Library and Museum)
October 18, 1990
image pdf (Government Records)
November 29, 1990
transcript pdf (Courtesy of David S. Ruder)
March 15, 1991
image pdf (Courtesy of David S. Ruder)
March 15, 1991
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
March 20, 1991
transcript pdf (Courtesy National Archives and Records Administration)
April 4, 1991
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
April 5, 1991
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
April 5, 1991
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
April 8, 1991
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
April 8, 1991
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
April 9, 1991
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
May 16, 1991
transcript pdf (Courtesy of David S. Ruder)
May 24, 1991
transcript pdf (Courtesy of FINRA)
September 20, 1991
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
October 17, 1991
image pdf (Courtesy of George Bush Presidential Library and Museum)
February 13, 1992
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
February 26, 1992
image pdf (Courtesy of the Summergrad Family)
March 26, 1992
image pdf (Courtesy of Stuart Kaswell)
September 16, 1992
transcript pdf (Anonymous)
March 4, 1993
image pdf (Anonymous)
May 6, 1993
image pdf (Anonymous)

Oral Histories

10 March 2010

James Doty

(Made possible through the support of ASECA - Association of SEC Alumni, Inc.)

07 April 2015

Edward Fleischman

06 July 2012

Kathryn Fulton

25 April 2014

Paul Maco - Part I

13 June 2005

Michael Mann

24 June 2015

James McConnell

05 March 2012

William McLucas

25 February 2008

Phillip Parker

15 May 2014

Richard Roberts

02 November 2005

Mary Schapiro

14 February 2006

Walter Schuetze

16 June 2011

Marianne Smythe

19 April 2006

Ethiopis Tafara

Programs

02 June 2016

At the Crossroads of the White House and the SEC (Seventeenth Annual Meeting)

Moderator: Kurt Hohenstein

Presenter(s): Richard Breeden

22 April 2008

Fireside Chat - SEC Office of International Affairs

Moderator: Theresa Gabaldon

Presenter(s): Felice Batlan, Michael Mann

02 June 2004

Roundtable of SEC Chairmen

Moderator: David Ruder

Presenter(s): Richard Breeden, C. Bradford Cook, Roderick Hills, Arthur Levitt

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