SEC staff surfed porn sites during crisis buildup: inspector

April 23, 2010
SEC staff surfed porn sites during crisis buildup: inspector
By Ronald D. Orol
MarketWatch

WASHINGTON (MarketWatch) -- As the 2008 financial crisis was developing, top Securities and Exchange Commission employees and contractors were using government computers on official time to view pornography, according to an SEC inspector general.

The SEC's inspector general found that 33 employees or contractors violated commission rules and policies by viewing porn, according to a memo obtained Friday by MarketWatch. The investigation was requested by Sen. Charles Grassley, R-Iowa.

The memo reported incidents by year:

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2010: 3 so far
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2009: 10
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2008: 16
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2007: 2
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2006: 1
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2005: 1

The 33 employees cited in the memo represent less than 1% of the SEC's approximately 4,000 employees. Of those employees, 17 were senior officials whose salaries ranged from $100,000 to $222,000, according to the memo. It isn't clear if the employees discussed in the memo were involved in oversight matters related to the financial crisis.

According to the memo, a regional office supervisory staff accountant admitted he frequently viewed pornography at work on his SEC computer for about a year and accessed pornography on his SEC-issued laptop computer while on official government travel.

Another regional office supervisory staff accountant admitted that he used an SEC assigned computer to access Websites containing pornography and other sexually explicit material during work hours fairly frequently, sometimes twice a day, according to the memo.

Another regional office staff accountant received 16,000 access denials for Internet websites classified by the SEC's Internet filter as "Sex" or "porn" in a one-month period. "In addition, the hard drive of this employee's SEC laptop contained numerous sexually suggestive and inappropriate images," the memo said.

A senior attorney at the SEC's headquarters in Washington admitted accessing Internet port so frequently that, according to the memo, on some days, he spent eight hours accessing Internet porn.

"In fact, this attorney downloaded so much pornography to his government computer that he exhausted the available space on the computer hard drive and downloaded pornography to CDs or DVDs that he accumulated in boxes in his office," the memo said.

Rep. Darrell Issa , R-Calif., the Ranking Member of the House Committee on Oversight and Government Reform, said he was disturbed by the findings.

"It is nothing short of disturbing that high-ranking officials within the SEC were spending more time looking at pornography than taking action to help stave off the events that brought our nation's economy to the brink of collapse," he said in a statement. "This stunning report should make everyone question the wisdom of moving forward with plans to give regulators like the SEC even more widespread authority. Inexplicably, rather than exercise its existing regulatory enforcement authority, SEC officials were preoccupied with other distractions."

Ronald D. Orol is a MarketWatch reporter, based in Washington.