Goldschmid to Delay Departure

  The tenuous nature of several pending rule initiatives is evident in the decision of SEC commission Harvey Goldschmid statement that he will delay his exit from the commission from the end of the month for up to another 18 months.  Goldschmid, a law professor at Columbia, had voted with the departed chair, Donaldson, and the other Democratic nominee and against the two Republican nominees on a series on controversial SEC rule changes.  The rules, although adopted, have not yet become fully effective.  The rules include rules on mutual fund governance, on securities market structure, and on Secion 404 of Sarbanes-Oxley.  Mr. Goldschmid's delay signals the unease that Democrats in the Senate have with their power to control the appointment of new Democratic nominees.  Will President Bush find "conservative" Democrats to replace the incumbent Democrats and ignore the wishes of the Democratic leadership of Congress??  The rules for appointing members of the opposite party to the commission have never been formalized; they rest on tradition and courtesy.  Will the President respect the tradition in light of the increasing politicization of the agency??? The uncertainty of the answer to the effort of Democratic leaders in Congress to persuade Goldschmid to delay, at least until the new rules become effective.