WASHINGTON — Harvey J. Goldschmid, a former Securities and Exchange Commission member who played a key role in getting the American Bar Association to adopt an ethics rule to prevent municipal bond and other pay-to-play practices, died Feb. 12 at the age 74 from complications of pneumonia.
He was a Columbia law school professor at the time of his death, and the loss leaves many students, faculty, SEC officials, colleagues, and friends mourning.
"He was the model law professor, combining real world experience and transactional sense with a strong understanding of economic theory," said John [Jack] C. Coffee, Jr., another Columbia law professor and head of the Center of Corporate Governance. "Students adored him; practitioners respected him; and government agencies depended on him. We will not soon see his like again."
SEC chairman Mary Jo White said Goldschmid "had an outstanding career as a lawyer, educator and public servant."
He served as general counsel of the SEC from 1998 to 1999, as a special senior advisor to then-SEC chairman Arthur Levitt in 2000, and as a commissioner from July 31, 2002 through July 31, 2005 after being nominated by former President George Bush.
White said his "commitment to [the SEC] lived long past the days he spent working here" and that "the SEC mourns the loss of one of its own."
"At the heart of every useful program that took place at the commission during my years, Harvey had a key role," Levitt said on Friday. "Even before he came to the commission, he was a wonderful advisor and a great resource. He really was a creature of the SEC. He knew more about it certainly than I did before I got there. He was a mentor and a teacher for so many people at the commission."
Goldschmid worked with the Association of the Bar of the City of New York and Levitt for about four years to get the American Bar Association to adopt a rule for lawyers that would be similar to the Municipal Securities Rulemaking Board's Rule G-37 for broker-dealers. That rule temporarily bans firms from engaging in negotiated muni business with issuers for two years if they make significant political contributions to issuer officials who can influence the award of bond business, and then subsequently underwrite bonds for that issuer.
After much controversy, the ABA adopted Ethics Rule 7.6 in February 2000 that states: A lawyer or law firm shall not accept a government legal engagement or an appointment by a judge if the lawyer or law firm makes a political contribution or solicits political contributions for that type of legal engagement or appointment." The rule is effective in states if adopted by state organizations responsible for writing disciplinary rules for lawyers.
"Without Harvey, we could not have made that progress that we did in that area," Levitt said.
Levitt said that Goldschmid was so personable and knowledgeable, that whenever the SEC had problems in Congress, they would draft him to speak on the commission's behalf. "He was able to inspire confidence in everybody he interfaced with," Levitt said. There hasn't been an SEC chairman since Richard Breeden, who hasn't relied on Goldschmid's advice, he added.
Goldschmid is survived by his wife Mary and three sons, Charles, Paul and Joseph, who, like their father, all have law degrees from Columbia Law School. Funeral services will be private, but a memorial service is expected to be held at Columbia at a later date, according to a spokeswoman at the law school.
