WASHINGTON, July 14 (Reuters) - A Republican senator is accusing the U.S. Securities and Exchange Commission of failing to release records that he says are crucial to understanding how a controversial plan to tighten conflict-of-interest rules at Wall Street brokerages was drafted.
In a July 13 letter seen by Reuters, Homeland Security and Government Affairs Committee Chairman Ron Johnson told SEC Chair Mary Jo White he is frustrated that his nearly three-month-old request has not been fulfilled.
Johnson also said he fears the SEC is being wrongfully pressured from releasing the records by the U.S. Labor Department. The Labor Department told the Senate committee in a July 8 letter that it had asked the SEC to refrain from releasing the documents.
"Your noncompliance with the requests...in deference to the Labor Department raises serious questions about the commission's commitment to its independence," Johnson said.
An SEC spokesman said the agency is in the process of responding to the committee. According to Johnson's letter, the SEC's staff has been in touch with the committee on several occasions.
A Labor Department spokesman declined to comment, but the agency has provided the committee with about 800 pages related to its communications with the SEC.
The Wisconsin senator is among many Republicans who are unhappy with a proposed U.S. Department of Labor rule to forbid brokers who offer retirement advice from steering clients into higher-fee products, unless it serves the clients' financial interests.
Critics have said the rule might harm ordinary investors by limiting the kinds of investment options available to them.
They have urged the Labor Department to let the SEC take the lead in any rulemaking because the SEC is the primary regulator for the industry and has greater expertise.
The brokerage industry has often used this argument to undermine the Labor Department's rule, and has repeatedly questioned whether the department properly consulted with the SEC.
If internal communications between the two government agencies showed a lack of cooperation or disagreements, it could provide more fodder for Wall Street to challenge the rule down the road.
The Labor Department is part of the executive branch of government. As such, some of its internal correspondence concerning policymaking deliberations can be shielded from disclosure to Congress.
The SEC, however, is an independent federal agency outside of the executive branch. As such, Johnson said in his letter it is inappropriate for the Labor Department to tell the SEC what to release.
The department added that it is concerned about the SEC releasing any additional materials because they contain internal deliberations that might "chill" the rulemaking process.
Reporting by Sarah N. Lynch; Editing by Lisa Shumaker