Senators Seek Probe of SEC Member Who Assailed Citi's Gun Stance
Senators Seek Probe of SEC Member Who Assailed Citi's Gun Stance
(Bloomberg) -- Six Senate Democrats are asking the Securities and Exchange Commission’s internal watchdog to investigate a Republican commissioner who berated Citigroup Inc. executives in a private meeting over the bank’s decision to curtail some of the business it does with companies that sell guns.
Commissioner Michael Piwowar may have acted inappropriately during the April 24 meeting with several bank employees that was supposed to be about derivatives rules, the lawmakers said in a letter to the SEC’s inspector general. They cited a Bloomberg Businessweek story that reported Piwowar railed against the firearms policy and suggested that the bank would have difficulty finding support for its regulatory rollback requests at the Republican-led commission.
“We do have concerns that Commissioner Piwowar may have abused his government position in an attempt to unduly influence Citigroup to reverse a business decision that conflicts with his personal and political views,” the senators said in the letter they are sending to SEC Inspector General Carl Hoecker on Wednesday.
The lawmakers’ request comes after Senator Chris Van Hollen, a Maryland Democrat, asked SEC Chairman Jay Clayton about Piwowar’s comments at an appropriations subcommittee hearing earlier this month.
Van Hollen, who oversees the SEC as a member of the Senate Banking Committee, noted that “regulatory bodies should not be using their authority to try to assert the personal opinions of the members.”
Citigroup set its policy in the wake of the school shooting in Parkland, Florida, where 17 people died. It directs clients, mainly in the retail industry, to restrict the sale of firearms to customers under 21 and to those who haven’t passed a background check. It also bars the sale of bump stocks and high- capacity magazines. For those that don’t agree, Citigroup said it would help move their business to another bank.
Not long after Citigroup’s move, Bank of America Corp. announced that it would no longer provide financing to companies that manufacture military-style weapons for civilian use. Both banks have been sharply criticized by Republican lawmakers who have warned them to stay out of social debates and stick to their core businesses like lending to consumers.
Piwowar raised similar points with Citigroup and also reminded the bank that it had received billions of dollars in government aid during the financial crisis. An aide to the commissioner didn’t return a call and email requesting comment. Piwowar, whose term expired this month, has announced that he will leave the agency by July 7.
The letter to the inspector general was signed by Van Hollen along with Senators Kamala Harris and Dianne Feinstein of California, Christopher Murphy and Richard Blumenthal of Connecticut, and Robert Menendez of New Jersey.
To contact the reporter on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net
To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott
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