SEC’s $500m Office Expansion Plan Probed

In the wake of the SEC's failure to catch Bernie Madoff, the government agency has gone hog wild in leasing additional space in Washington D.C.

The curious leasing of additional space, to the tune of $500 million, has caught the eye of the SEC's inspector general, who has started a probe.

The probe, opened in the past few weeks, comes at a time when the agency says a budget impasse has forced it to curtail its work, reports FT.

FT continues:

The probe is examining two leases that the SEC signed last year for 1.1m square feet of office space, doubling the agency’s footprint in Washington. When signed, the leases would have cost the SEC $500m over 10 years.

The leases were struck when the agency anticipated a budget increase from Congress, but now a spokesman says the SEC has negotiated to shed 600,000 square feet of the 900,000 square feet originally leased at Constitution Center.

That would leave the SEC with 500,000 square feet of new space in Washington. In papers filed to justify the lease, the SEC said it needed room for 2,335 recruits it hoped to take if Congress expanded its budget.

The inspector general in September issued a report finding the SEC’s inadequate leasing procedures resulted in it paying excess rent of $203,000 for space in San Francisco.

The SEC estimates it needs from 150 to 300 square feet per worker. That would imply it was looking to add space in Washington for 3,600 to 7,300 employees – or at least 300,000 square feet more than needed for its projected recruitment.