Watchdog: Made dry lease "irresponsible" move

WASHINGTON - the Organization of internal supervision of the Securities and Exchange Commission has found that the Agency made "irresponsible" decisions in the rental of office space in downtown Washington for 556.8 million without a tender, before receiving funds from Congress.

An investigation by the SEC Inspector General concluded that the lease of 10 years of the Agency of 900,000 square feet of space in the building high-end, signed last July, was "one in a long history of misfire and misguided decisions rental" since 1990. Inspector General David Kotz recommended disciplinary action against officials involved in the leasing decision.

The report released Tuesday was an another black eye for an agency that was hampered by its inability to detect the Ponzi scheme of Bernard Madoff billions of dollars and other regulatory failures.

The Kotz Office is also investigating manipulation of the SEC of David Becker, former general counsel the Agency, which has benefited financially Madoff scheme and was allowed to play a key role in the development of policies on how the Madoff victims should be compensated.

The report on the lease to the Centre of the Constitution found that between the last June and July, the Administrative Services of the SEC Office has made a "deeply flawed and unsound analysis" to justify the need to 900,000 square feet, and "grossly overestimated" the amount of space required. The analysis was based on estimates of the Congress increased funding to meet the new functions for the SEC under the law of financial review in July, Congress passed the report said.

The Administrative Office "made the grandiose plans to rent a top installation range in the Centre of the Constitution", he said.

However, he noted, Congress authorizing a federal agency funding ensures that the Organization will receive the money in the process of the budget of the Congress. In this case, the Administrative Office of inflated SEC its estimate of how many newly created positions would need space to also include the number of entrepreneurs, trainees and temporary staff.

The SEC is not funded by taxpayers. Its funding comes from fees paid by public and other business entities registering stock with the Agency. However, a part of the revenue it collects goes to the Department of the Treasury for government coffers. And Congress must approve annual budgets of the SCE.

Last fall, when it became clear that the SEC would step obtain sufficient funds from the Congress for the current fiscal year for the additional staff, the Agency said the owner of the Centre of the Constitution that he did not need approximately 600,000 square feet of total he had leased. In January, the owner has signed leases with two other federal agencies to 558,000 square feet of total. In March, the SEC said that he was trying to sub-lease remaining 342,000 square feet; These efforts continue, according to the report.

Now the SEC is in conflict with the owner, which is to research 93.9 million of dollars in damage and interests of the Agency, said the report. SEC denies that there was no compensation. The Agency supports its agreement allowing the owner of rental of space for the other two agencies he is released from any obligation for the space.

SEC considering report by Kotz, spokesman for the Agency John Nester, said Tuesday.

The Agency has taken steps to improve its operations leasing, said niche, including requiring that future decisions to be approved by the Chief of leasing operations and reduce the amount of space allocated to entrepreneurs Office.