“For William H. Donaldson, the honeymoon is over,” writes Stephen Labaton in today’s New York Times.

“Ushered into the chairman’s office of the Securities and Exchange Commission nearly six months ago to revive an agency that was adrift in political storms, plagued by insufficient resources and overwhelmed by corporate filings, Mr. Donaldson set about to reshape the agency.”

“Through skillful diplomacy, he earned cautious support from Democrats and wide praise from Republicans as well as from investor groups and Wall Street institutions. In a short time, he has lifted the morale at the agency through management changes and budget increases.”

” ‘The commission is in enormously better shape,’ said Harvey J. Goldschmid, a Democratic commissioner. As a handpicked choice of Senator Paul S. Sarbanes, Democrat of Maryland, Mr. Goldschmid often found himself both publicly and privately at odds with Mr. Donaldson’s predecessor, Harvey L. Pitt.”

“In contrast, Mr. Goldschmid has never been on the opposite side of Mr. Donaldson on a major vote. Mr. Donaldson and Mr. Goldschmid both describe a cordial working relationship, and Mr. Donaldson has even occasionally found himself on the same side of a vote with Mr. Goldschmid while one or both of the other Republican commissioners was on the other side.”

” ‘Bill Donaldson has brought collegiality, intelligence, maturity and a willingness to take important steps,’ Mr. Goldschmid said.”

“But now he has begun to confront a series of policy choices that have provoked some political fire. A number of companies and Wall Street institutions have complained that new rules imposed over the last year have been too steep and have quietly begun to lobby Congress and the commission to roll them back.”

“In an interview today over lunch in his cavernous sixth-floor office here, Mr. Donaldson said he wanted to remain above the political brawls that have plagued his Democratic and Republican predecessors.”

” ‘I’ve tried to avoid getting into the political,’ he said. ‘We’re an investor agency. We’re not a political agency.’ “

“It may be impossible, however, to remain above the fray. In recent days, Mr. Donaldson has been sharply criticized by Eliot Spitzer, the New York attorney general, for failing to challenge a provision in House legislation proposed by the Republicans that state regulators say will strip them of enforcement authority in financial cases.”

http://www.nytimes.com/2003/07/25/business/25DONA.html