Hooray, Congress passed the Dodd-Frank regulatory reform bill into law last week! Now we can all start speculating about how ineffective, irrelevant and incomplete it is! Right? Um … right?

Here’s the unvarnished truth, folks: Nobody talking about the Dodd-Frank Act today has any idea whether it will really achieve its intended aim of creating a stronger financial system. Not the lawmakers who passed it, nor the special interests who drafted it; not the chattering classes who gabbed about it on CNN and CNBC all weekend long, nor your outside counsel who will keep gabbing about it while billing you $500 an hour. Nobody really knows what the consequences of this law will be—not even me, much to my dismay.

We can, however, describe what the success or failure of all this reform will look like. After all, we know what the Dodd-Frank Act is supposed to do, at least according to the vague sense of public sentiment out there. So I’ve been pondering what we collectively—Corporate America, Congress, and the investing public—will all want to know about the Dodd-Frank Act at some (still undetermined) point in the future. Seven questions came to mind:

• Will it improve how we handle systemic risk?
• Does it embolden enforcement?
• Does it improve corporate governance?
• Will it reduce liquidity risk?
• Does it hold reckless parties accountable for their behavior?
• Will it reduce taxpayer bailouts?
• Will it prevent another financial crisis?

Like most human beings, I somewhat wish derivatives had never been invented—not because they aren’t useful (they are), but because discussion of how to regulate the derivatives trade makes my head hurt. I’m sure I am not alone on this.

Nevertheless, how derivatives are created, traded, and disclosed to the public is indeed an important discussion to have. Congress is in the final stages of hashing out its regulatory reform bill—which at last count has hit more than 1,900 pages—and apparently derivatives have become a late-stage battleground before the final legislation passes and becomes law.

To many executives, this may seem like an obscure fight that only matters to the corporate treasurer or maybe the risk-management office if your company works in financial services. It isn’t. The more you dig into exactly what the derivatives business might look like after reform, the more queasy accounting, financial reporting, and compliance officers should feel. Let me give you a simple, hypothetical example.

Acme Airlines is an international airline that has to worry about fluctuations in the price of oil. It wants to purchase derivative instruments that will off-load those risks to another party more willing to shoulder them. Those derivatives will cost Acme some money, yes, but that’s a small price to pay for stability in a very uncertain part of Acme’s business.

Right now, Acme can buy those derivatives by calling around to various investment bankers, hedge funds, or anyone else willing to enter into the deal. XYZ Bank steps forward and says it is happy to provide oil for $72 per barrel for the next 12 months, in a deal worth a total of $100 million. Of course, XYZ wants some protection in case Acme goes bankrupt during that time, so Acme posts one of its jets as collateral. The deal is done.

Now let’s consider that deal in a post-reform world.

At the core of Washington’s reforms is the idea of a clearinghouse to manage derivatives trading. Instead of Acme shopping around for derivatives and buying them from XYZ, it approaches the New York Derivatives Exchange and buys its derivatives directly from the exchange. The Derivatives Exchange, in turn, then sells that derivative exposure to another party—perhaps XYZ Bank, but perhaps some other party or even several parties, each getting a piece of the $100 million in exposure.

What’s happened here? The risk of the derivative instruments has shifted from the counter-party (XYZ Bank) to the clearinghouse. That prevents Acme from getting screwed should XYZ ever fail to deliver its end of the contract—but it also means that our clearinghouse, New York Derivatives Exchange, carries a lot of risk. And that, in turn, means the exchange will need sky-high capital reserves.

You, Acme Airlines, will be paying for those higher reserves.

Exactly how much more this new clearinghouse model will drive up costs is still anyone’s guess. Lawmakers hope that multiple clearinghouses will emerge, competing against each other for business and keeping price increases minimal. I see the Econ 101 logic in that, but I’ll believe it only when I see it.

We have two other headaches in our clearinghouse world. First, remember that jet Acme posted as collateral to XYZ? That option flies away. The clearinghouse will want cash as collateral. After all, if Acme does default on its end of the contract, what good is it for the clearinghouse to take possession of a plane? Second, the amount of cash the clearinghouse will want as collateral will fluctuate as well, every day, to offset the clearinghouse’s own risks and capital reserve requirements.

Again, nobody yet knows exactly how much cash this new model will cost, although I suspect the Wall Street quants are already working on that. But it will cost something.

Foremost, accounting and financial reporting executives should feel the most unease here. They’ll be the ones calculating all these shifting derivative prices, and they’ll be part of that finance team ensuring that the company has enough cash on hand to meet the clearinghouse’s demands every day. None of that will be easy.

Compliance and risk officers won’t get off the hook either. Risk officers will need to pay more attention to whether the company should take out derivatives contracts in the first place, given the higher cost of purchasing them. They’ll need to ensure that the company stays within any financial restraints (say, a debt covenant or some key leverage ratio) that might trigger higher collateral requirements from the clearinghouse. Compliance officers will need to ensure all reporting is done accurately, promptly, and properly. And of course, all that cash going to collateral payments has to come from somewhere—like, say, that anti-bribery training program you wanted to launch in 2011.

All this is not to say that reforming derivatives is a bad idea; on the contrary, this is one part of the financial world that desperately needs more oversight. But Congress is down to brass tacks now, and no matter how boring or complicated derivatives oversight may seem, it’s worth paying attention. Occasionally those folks in Washington do stuff that actually matters.

Well, it’s that time of year again: The Compliance Week annual conference.

This is our fifth year holding an annual conference, and somewhat to my amazement, we genuinely do have the best lineup in our brief history. We will have more attendees, listening to more speakers, in more sessions, than ever before. Compliance Week will post updates from the conference throughout the week, and have comprehensive coverage in both our June 2 and June 8 newsletters, as well as our July print magazine.

For now, however, let me call out a few sessions that I suspect will be especially interesting:

U.S. Rep. Barney Frank. We did not consciously plan to have the chairman of the House Financial Services Committee as a keynote speaker at the very moment that a final regulatory reform bill would decided by Congress—but timing is all, and we could not ask for a better coincidence. I realize many people in this country oppose Frank’s view of financial regulation and of government generally. Nevertheless, he’s one of the most powerful politicians in Washington that our audience should care about. He will have a unique insight into what is likely to happen with financial reform. He will talk about it on Tuesday morning.

SEC Commissioner Luis Aguilar. This is Aguilar’s second year as a keynote speaker for Compliance Week (Monday morning, first thing), and we could not be more pleased with that. Again, whether you agree with Aguilar and his two other Democratic commissioners or not—they’re the SEC, and what they say goes. Aguilar has emerged as a stalking horse among the commissioners, floating ideas early that often become priorities for the SEC later. For example, when the SEC issued interpretive guidance on reporting climate change risks earlier this year, Aguilar said he hoped that would be only the opening salvo in more disclosure about environmental, social and governance issues. I plan to ask him what might come next. I also want to ask him whether the SEC has a backup plan if the Supreme Court rules sometime next month that the Public Accounting Oversight Board’s governing structure is unconstitutional.

Compliance monitors. You think life with your compliance monitor is bad? United Launch Alliance, a joint venture between Boeing and Lockheed to develop new space rockets, had to accept three monitors to get off the ground, so to speak. Not only did we get the delightful Cindy Corrigan, head of internal governance at ULA, to speak about that; she has brought along one of her compliance monitors and a U.S. Air Force official who also helps oversee the venture, and all three plan a detailed presentation on how they manage this complex relationship. Monday at 2 pm, and expect a full story on this session in a future edition of Compliance Week.

Social media and compliance. If you’re looking for an opportunity to panic about new technologies leaping ahead of the compliance department’s ability to manage, we have you covered. We’ll have the compliance chiefs at Johnson & Johnson, Best Buy, and Travelers Cos. talking about their social media policies, and how they have come to embrace the technology despite legal concerns since, frankly, it’s not going to un-invent itself. Monday at 3:30 pm.

Disclosure update. Our Tuesday afternoon speaker will be Shelley Parratt, deputy director of the SEC Division of Corporation Finance and point-person on all things disclosure. She is the one who can speak to the new proxy disclosures companies had to start making this year about climate change, executive pay, boardroom structure and more, and will give us an early take on what the SEC has seen so far. Don’t worry, I’m also going to ask her whether she plans to issue a more expansive report later this fall (as the SEC has done in the past) to give tips for next year’s filings.

Those are only five of the dozens of sessions we have on deck, and I wish I had time to write about the others: the CEO and the chairman of the board at JetBlue will be talking about corporate culture at their business; acting Deputy Attorney General Gary Grindler and Assistant Attorney General Lanny Breuer will talk about corporate investigations and corruption enforcement. We’ll cover money laundering, GRC software tools, and much more.

And for anyone in the Washington, D.C., area over the next three days—it’s not too late to attend! Just drop by the Mayflower Hotel, walk up to the registration desk, and say hello. We’d be happy to see you there.

Sen. James DeMint, R-S.C., has promised to introduce an amendment to the Senate’s proposed regulatory reform bill that would exempt non-accelerated filers from compliance with Section 404(b) of the Sarbanes-Oxley Act.

A Section 404(b) exemption for non-accelerated filers was notably absent from the reform bill unveiled by Christopher Dodd, chairman of the Senate Banking Committee, on Monday. Such an exemption does exist in the regulatory reform bill passed by the House in December, but unless similar language gets shoe-horned into the Senate bill, non-accelerated filers will indeed face compliance with Section 404(b) starting June 15.

Dodd plans to start debate on the bill at a hearing early next week; proposed amendments must be submitted by the end of Friday. Precisely what language DeMint will include in his bill is unclear, but he has promised that it will be at least as vigorous as the language in the House bill—which exempts public companies with market capitalizations below $75 million from Section 404(b), the part of SOX that requires companies to get an external auditor’s attestation to the strength of their internal control over financial reporting.

DeMint’s exact words were “I think we can make it broader,” which is intriguing. Several anti-SOX lawmakers on the House Financial Services Committee originally proposed exempting companies with market caps as large as $700 million, an actual rollback of SOX compliance since those larger filers had already been complying with Section 404(b) for several years. The good governance crowd raised hell over that, which led to the $75 million threshold, since non-accelerated filers haven’t yet begun compliance anyway.

Several questions here. Conspiracy theorists believe the House exemption came as part of a larger bargain: the Obama Administration threw its support behind the Section 404(b) exemption, in exchange for support of another provision to give shareholders access to the proxy statement. The Senate bill also has language allowing proxy access—so is the DeMint amendment part of a similar deal?

In previous years, I’d have guessed yes: Each side introduces amendments the other dislikes, and a bill gets passed that both parties somewhat like; that’s politics. But Senate Republicans have shown a clear pattern since the Obama Administration took office: They demand all sorts of amendments to whatever major legislation is on the floor; Democrats include those amendments in the bill; and then Republicans vote against the larger bill anyway. We saw that with the tax cuts they demanded for the stimulus bill passed in 2009, and we’re seeing it with various reforms to the healthcare bill now.

Politically, that strategy makes good sense for Republicans. They look good to their constituents, they water down the bill in question so much that the Democrats’ constituents hate it, and that clears the path for the Republicans to say, “Everyone hates this bill, so why don’t we start over from scratch?” That is exactly how the Republicans stymied healthcare legislation.

So are Dodd and the Obama Administration going to fall for the same sucker punch again? Dodd did just get sand-bagged by another Republican senator, Robert Corker, who promised support and then bailed out at the last minute; I’m sure he’s annoyed at that. But if the healthcare bill somehow unravels in the next week or two, Democrats will be desperate to show that yes, they can actually get things done.

It’s a mess. But then, that’s Congress.

The long-awaited regulatory reform bill from Sen. Christopher Dodd finally landed with a ponderous thump on desks across Washington, Wall Street and America this afternoon. It clocks in at 1,336 pages, which gives it more physical heft than the reform bill passed by the House (1,289 pages) last December.

The bill will inevitably have more political heft, too, so compliance and governance executives should start giving it a read. (The faint-hearted can start with an 11-page summary the Senate Banking Committee has also posted. You wimps.)

As we’ve all seen from various stories leaked to the media since late last week, the lion’s share of the bill deals revolves around the risk of another large financial firm collapsing as Lehman Brothers did in 2008, and around creation of a Consumer Financial Protection Agency to regulate the financial products sold to the public. Those are complex topics already dissected by other business media elsewhere, so I’ll put them aside for now. We still have plenty of other governance reforms to discuss, so let’s pull out the scalpel and start slicing those into their component parts.

• Self-funding of the SEC (Section 991). Allows the Securities and Exchange Commission to set its own budget, through fees, penalties and other assessments it might impose on SEC registrants. This is the Holy Grail of the commissioners; they have clamored for it for years, and the arguments in favor of a financially independent SEC are compelling. Sen. Chuck Schumer introduced this particular piece of legislation last fall, as well as numerous other governance reforms. The House bill does not include similar language, but it does call for an outside review of SEC operations, including the wonderfully undefined question of “funding.”
• Shareholder proxy access (Section 972). Allows, but does not require, the SEC to adopt a rule allowing shareholders to place nominations for board of directors in the proxy statement. This is the legislative protection the SEC has been wanting, so it can safely proceed with the proxy-access rule it has wanted to pass for months. This is largely in step with language in Section 7222 of the House bill.
• Majority voting in uncontested elections (Section 971). Directs the SEC to pass a rule within one year that orders the stock exchanges to bar any listed companies that don’t require directors to win a majority of votes cast in uncontested elections. (A plurality is still the standard for contested ones.) One caveat: The SEC would have the power to exempt issuers based on size, market capitalization, and so forth, which I presume is to quell the panic non-accelerated filers would have over a rule like this. The House bill does not contain a comparable provision.
• Whistleblower protections (Section 929A). Amends federal law to clarify that yes, whistleblower protections extend even to employees of a public company’s various subsidiary operations. The only stipulation is that the subsidiary’s financial results must be rolled up into the consolidated statements of the parent company. The language does not include any mention either way of employees at foreign subsidiaries. I cannot find any similar language in the House bill.
• Whistleblower rewards (Section 922). Creates a program within the SEC to encourage people to report securities fraud by creating rewards of up to 30 percent of funds recovered based on the information provided. This is similar to the rewards offered under the False Claims Act. It also mirrors language in Section 7203 of the House bill.
• “Comply or explain” for splitting chairman and CEO roles (Section 973). Directs the SEC to pass a rule within six months ordering companies to explain why they do or do not divide the chairman and CEO roles at their company. Since the SEC has already passed other proxy disclosure reforms requiring essentially the same thing, this seems like a moot point to me.

For non-accelerated filers, however, the most important part of the Dodd bill is what is not included: There is no proposal to exempt small public companies from Section 404(b) of the Sarbanes-Oxley Act.

Prudent CFOs at non-accelerated filers should begin panicking now. Yes, a 404(b) exemption is included in the House bill, but Dodd’s bill in the Senate still faces a long, hard legislative slog in coming weeks.

I assume Dodd knows how to pull together the 60 votes he will need to overcome a Republican filibuster, but he will need every single Democrat and at least one Republican to do it—and so far, no Republicans have stepped up to support the bill. The screeching political fights ahead will all deal with the Consumer Financial Protection Agency, expanded powers to the Federal Reserve, new regulation of derivatives trading, and the like. Nobody is talking much about excusing small companies from Section 404(b), since it truly is a relatively obscure matter in the vast sweep of regulatory reform.

Meanwhile, the SEC’s deadline for Section 404(b) compliance—annual reports for fiscal years ending on or after June 15, 2010—now looms less than three months away. If the Dodd bill collapses into chaos or simply ignores the issue, non-accelerated filers could have a nasty surprise in store for them.

We’ve got quite a week of compliance and governance news coming up this week, folks. I can’t recall the last time we’ve seen so many different stars in our particular universe align, so perhaps it’s worth drafting a scorecard for the week:

Shareholder activism and disclosure. Remember that investor advisory committee the Securities and Exchange Commission formed last year? Neither did I, so I was pleasantly surprised to see that the committee will hold its third meeting ever on Monday. On the agenda are reports from various sub-committees—including the “Investor as Owner Subcommittee,” which plans to give its views about Regulation Fair Disclosure, as well as reports on plans for environmental, social, and governance disclosure and on financial reform legislation. Hmmm.

Typically the recommendations that these SEC advisory committees make do carry some influence, and SEC Commissioner Luis Aguilar has already hinted that the Commissioner has big ideas for disclosure at least as it pertains to climate change, which is a stone’s throw from the “ESG” disclosure this committee will discuss. So whatever these people are doing is worth watching.

Bank of America smackdown. Sometime this week—possibly as soon as Monday—federal judge Jed Rakoff should make a ruling in the SEC’s proposed enforcement action against Bank of America. I say “should” because at almost every turn, Rakoff has told the SEC to re-check its homework: draw up stronger sanctions against BofA, provide more evidence, and so forth. What was originally a $33 million settlement reached last year was reborn into a $150 million settlement replete with a raft of governance reforms, and should be great fodder for the next season of “Damages.” Probably it will reach a conclusion Monday. Personally I hope not, because it’s the best governance spat going.

Aside from the obvious implications for Bank of America, the rest of the corporate world should watch this settlement to see just how far other parties can push enforcement settlements. The SEC’s new proposal forces governance reforms such as a say-on-pay vote for shareholders, “super-independence” for the board’s compensation committee, and CEO certification that he has reviewed all information in the proxy statement. And the SEC has proposed those reforms because Rakoff told the agency last year to impose stronger sanctions against BofA. If Bank of America becomes an indicator of enforcement actions yet to come, Corporate America could be in for a rough time.

IFRS! IFRS! We pivot back to the SEC for more news on Wednesday, when the commissioners will hold an open meeting to discuss their latest thinking on adopting International Financial Reporting Standards in the United States. The meeting notice is rather cryptic: the SEC will consider “whether to publish a statement regarding its continued support for a single-set of high-quality globally accepted accounting standards and its ongoing consideration of incorporating IFRS into the financial reporting system for U.S. issuers.” You don’t get much more vague than that.

I suspect the underlying goal will be to dial back expectations that the Commission will move ahead with adoption as originally envisioned in the IFRS roadmap proposed in 2008. That plan called for the Commission to decide in 2011 on whether to require IFRS adoption by 2014, and to allow a select group of large filers to experiment with filing in IFRS as soon as this year. Since then, however, the economy crashed and the SEC has had more pressing issues on its calendar. The select group of large filers who might volunteer to try IFRS conversion never materialized. And the Financial Accounting Standards Board and the International Accounting Standards Board, which keep promising to converge U.S. and international accounting rules by June 2011, still have a huge volume of work in front of them. All that makes speedy progress on IFRS adoption unlikely.

Regulatory reform. Christopher Dodd, chairman of the Senate Banking Committee, may unveil his latest proposal for reforming financial regulation and corporate governance this week. Precisely when this may happen is unknown, but news broke last week that Dodd and the Obama Administration have reached an agreement on creating a “council of regulators” to monitor systemic financial risks rather than one supra-agency. The chairman of the this council would be the treasury secretary, and the vice-chair the head of the Federal Reserve.

Compliance officers should remember several points here. First, a regulator of systemic risk isn’t the major sticking point with the Senate legislation; a consumer financial protection agency is. Dodd’s last proposal died a quick death in November from lack of interest and any hint of Republican support. He has made significant efforts to win support of committee Republicans this time around, but the party as a whole implacably opposes any hint of larger government, which a financial protection agency clearly is. So don’t be surprised if this new bill quickly sinks into the usual Senate quagmire, too.

Second, all this talk of Senate hang-ups over risk regulators still ignores the already-passed House bill, and its provisions to exempt small filers from compliance with Section 404(b) of the Sarbanes-Oxley Act. That 404(b) exemption was not in the first Dodd bill; we’re waiting to see whether it will be in the second one. Either way, reform legislation is still a long, long way from success—and 404(b) compliance goes into effect for small filers on June 15 of this year. As I’ve warned previously, any non-accelerated filer betting that Congress will deliver a permanent 404(b) exemption before that deadline does so at his peril.

The other day I pondered whether the improbable ascendancy of Sen. Scott Brown, R-Mass., might delay or otherwise thwart Democrats’ plans to overhaul financial regulation. Let’s not forget one other niche of corporate compliance where Brown’s arrival as the 41st Republican senator might have serious consequences.

He might allow the dreaded Section 404(b) of Sarbanes-Oxley to take effect on small filers, at long last.

Think about it: Last fall the Securities and Exchange Commission gave non-accelerated filers a final warning that compliance with Section 404(b), which requires public companies to get an outside auditor’s review of internal controls, must start with annual reports filed for fiscal years ending on or after June 15, 2010, period. The House of Representatives then passed its massive regulatory overhaul bill in December, specifically exempting non-accelerated filers from Section 404(b) permanently. For that exemption to become law, however, it must be included in regulatory overhaul legislation approved by the Senate—and Brown’s arrival has just made passage of Senate legislation much less likely.

The Senate’s reform legislation nominally exists as a draft bill circulated by Christopher Dodd, chairman of the Senate Banking Committee. That bill doesn’t even include a Section 404(b) exemption, and it’s been pretty much dead since Dodd unveiled it in November anyway. All indicators are that the Senate will spend its time bickering over curbs to the power of the Federal Reserve and whether to include creation of a Consumer Financial Protection Agency in the bill, not a Section 404(b) exemption. With Brown giving the Republicans the power to filibuster any final bill, and Dodd able to stand his ground since he’s not seeking re-election, we can all expect that bickering to take lots of time.

Like, say, beyond the June 15 compliance deadline set by the SEC that’s still tick-tocking away. At the Securities Regulation Institute annual conference I’ve been attending this week, several speakers guessed that reform legislation might not happen this year at all.

After all, even if a Section 404(b) exemption gets inserted into the bill, and Republicans settle their differences with Dodd, and the Senate reconciles its bill with the House bill, and the 404(b) exemption survives that process, and both chambers then vote in favor of the full bill, and the president signs it into law—all this assumes Washington doesn’t have other demands on its time, like starting over with healthcare legislation, or cutting the deficit, or running for re-election.

This makes me wonder whether the SEC might end up granting another extension on compliance after all. Yes, that would be a huge turnaround from its previous statements; Chairman Mary Schapiro clearly wants to extend Section 404(b) to all filers and move on with life, as do her two fellow Democratic appointees to the Commission. But consider a world where non-accelerated filers must cough up auditors’ attestations about internal controls for some reporting periods (which they’ll flunk anyway, since none of them have been preparing for it), and then that requirement goes away after Congress finally does pass an exemption. How do investors determine that disclosed weaknesses in internal controls were ever resolved?

Let’s take it one step further. What if a permanent exemption arrives on Oct. 1, say, and some filers have made 404(b) disclosures but others dodged the bullet? Could that latter group ever compare itself to companies in the former, since they now have different standards of scrutiny over their internal controls? What if there’s a restatement, and the lawsuits start flying? I’d welcome any guesses from securities lawyers out there who think about these things.

Of course, this might all be much ado about nothing, if the Senate moves forward on reform promptly. But as Republicans have been gleefully noting these last two days, now that Scott Brown is with them, they can stop anything from moving forward at all.

Well, that was quite a political curveball Massachusetts threw yesterday.

Scott Brown’s startling victory in the special U.S. Senate race should, in truth, startle very few people. Compliance Week is based in Massachusetts and I personally have lived here almost my entire life, so first let me dispel a few notions about why Republicans captured such a vital political prize. Then we can move on to what his arrival in the Senate means for the future of regulatory reform.

Brown won simply because the Democratic nominee, Martha Coakley, could not campaign her way out of a paper bag. She rarely advertised (until it was too late), and rarely met actual voters (until too many of them began drifting towards Brown). Coakley also never faced a serious battle in her previous runs for lower office. Her first campaign was for a local district attorney’s seat, and nobody ever cares about those races; her second was to run for state attorney general in 2006, when she faced token opposition and bounced into office along with the formerly popular Gov. Deval Patrick. But real, spirited Republican opposition? She’d never seen that until about three weeks ago.

Brown, on the other hand, flip-flopped from his previous opposition to abortion rights and gay rights, as well as from his previous support for the Massachusetts healthcare law that’s the model for what he wants to kill in the Senate. Yes, he happened to ride a wave of voter dismay at high taxes to victory. But any Democrat with a modicum of political sense and money—and we do have a few here—could have pasted Brown like the waffling piece of wallpaper he is. Anyone else who believes his victory is a shining star announcing the rebirth of Republican ideology clearly isn’t from here.

Now, how will the arrival of the 41^st Republican senator affect regulatory reform in Washington? I can immediately see two consequences.

First, we still have the matter of a regulatory reform bill kicking around the Senate Banking Committee. The committee chairman, Christopher Dodd, has said he wanted to craft a bill in collaboration with the Republicans on the committee, rather than see yet another major piece of legislation passed only by Democrats. Well, now that’s not just political posturing—he and the Democratic leaders do need Republican support for a final bill, period. Dodd allegedly has already been reconsidering the wisdom of a Consumer Financial Protection Agency akin to what’s in the House bill, and Republicans have been stirring up opposition to the CFPA as yet another bloated regulatory agency that will only harm the taxpaying public. If the Dodd had to give one big concession to get Republican support, killing the CFPA would be a good way to do it.

I also wonder about the idea of allowing the Securities and Exchange Commission to be self-funding. The current Senate bill does contain that provision; the House bill does not, but does give the SEC huge budget increases from now to 2015. I can’t imagine conservatives would be thrilled with an empowered and emboldened SEC either, but self-funding does save tax dollars.

(By the way, Brown has not served on any committees in the Massachusetts State Senate related to banking or finance, so I suspect we won’t see him end up on the Banking Committee.)

Second, there’s a small but steady buzz by nattering nabobs of the media about the fate of Treasury Secretary Timothy Geithner. He looks increasingly bad in how he handled federal guarantees to banks looking to collect on the debts that put AIG into receivership, and the nabobs have begun wondering when Geithner will resign. Forty-one Republican senators makes the calculus of a Geither resignation more complicated. If Geithner leaves, the Obama Administration will need to kow-tow to the pitchfork political climate currently sweeping the GOP, and Wall Street isn’t popular right now anyway. I’d expect a replacement with big plans to knock some heads in the financial sector. Those plans will fail (as all plans to knock Wall Street heads do), and Corporate America will get nothing but a big dollop of frustration, failure and uncertainty.

Well, Compliance Week seems to have touched a nerve with news of the latest speaker for our annual conference this spring: Congressman Barney Frank.

As some of you might have seen already, earlier this week we sent out a mass email announcing that Frank, chairman of the House Financial Services Committee, will be the keynote speaker at our conference (May 24-26, in Washington, D.C.). We consider this good news. Corporate compliance officers, internal auditors, financial reporting executives and boards of directors are all awaiting a tectonic overhaul of corporate governance in this country. Since Frank is, you know, the person pushing the legislation through Congress, we decided it would be useful to give Compliance Week readers a chance to hear his thoughts on the matter and ask him a few questions.

Most of you seem to understand that logic. A vocal minority, however, opened the e-floodgates and fired off the usual denunciations of Frank as a liberal windbag. One bitter gem of an example:

Barney Frank is a despicable liar who puts self-interest before the country’s best interest. He will be tossed out on his ear in November, so I personally think he is a waste of your good money—and mine. I am disappointed with your choice of keynote speaker, and I will not be attending. I’ll also have to seriously weigh my subscription options next time it rolls around.

Yikes. First off, Frank is running against token Republican opposition this year and will be re-elected. Second, the Democrats will retain control of Congress this year and Frank will continue to be chairman of the Financial Services Committee. Third, this person (the corporate controller at a nationally known retailer) should consider a few anger-management classes. Or at least try yoga.

We received several dozen more responses like that, some of them equally vitriolic and ignorant, most of them assuming that if you don’t listen to what Frank has to say, somehow what he does won’t affect you. Others said someone should grill Frank on whether he helped drive the mortgage crisis by tinkering with the Community Reinvestment Act in the 1990s … and then promptly said they personally couldn’t be bothered to do the asking. I see.

I’ve had the experience of interviewing Barney Frank several times in my career, so let me confirm: Whether you agree with his politics or not, Frank is among the most intelligent, well-versed people in Washington. More to the point, he is also among the most powerful. He is a master of the legislative minutiae that ultimately end up being what really matters when it comes time to comply with the law. So if you want to know how the United States’ new corporate governance regime came to pass (we’ll have a new one by May, remember), or why some elements of reform became law while others died, or how Congress expects you to handle this new challenge, or if you simply want to uncork your frustrations to the elected official who oversees your line of work—Frank’s speech will be the opportunity to do any of that.

My only advice is that if you do want to ask the congressman a question, for your own sake, be prepared. Frank always is, and if you don’t know what you’re talking about (like my bitter commenter above), you won’t do yourself or other attendees any favors.

You can also see all our other speakers, an agenda, and extended early-bird pricing on our Compliance Week 2010 Conference webpage.

You may need to dust off some old brain cells to recall (I did), but the 2000s began with recession, financial meltdown and radical legislative overhauls from Congress to fix corporate governance. Next came years of struggle to master the new contours of corporate compliance, complete with policy spats at the Securities and Exchange Commission, enforcement actions from the Justice Department, and briefings galore to corporate boards confused about their new duties in a new era.

And then we ended the decade right back where we started: with recession, financial fraud, and radical legislative overhauls from Congress to fix corporate governance.

Will the 2010s be the same, with more confusion to come and then more repeating of mistakes we already made? I hope not… but I suspect they will.

Congress has already demonstrated, yet again, its constant prediliction to surrender to special interests. The financial reform bill that seems destined to become law would scuttle Sarbanes-Oxley compliance for small companies and endangered the independence of the Financial Accounting Standards Board. It would also establish a new bureaucracy in the Consumer Financial Protection Agency, whose jurisdiciton and enforcement power are still unclear, and pave the way for new shareholder activism and emboldened SEC enforcement. In my opinion, only the end of SOX compliance for small companies and the changes to FASB oversight are clearly bad ideas—but many, many more provisions in the reform legislation are unclear ideas, which for compliance officers is pretty much equal to “bad.”

Equally ominous were the legal fireworks at the Supreme Court earlier this month. In the space of two days, we saw plaintiffs make compelling cases that both the Public Company Accounting Oversight Board and the legal theory of “honest services fraud” (a key tool to prosecute white-collar crime) are unconstitutional. By later this spring we may well see both overturned. How might that change the day-to-day challenges of chief audit executives, chief compliance officers and audit committees? Nobody really knows. But those decisions will drop another big heap of uncertainty on your plate.

And those are just the headaches for bread-and-butter compliance issues you’ve been worried about for years. We haven’t even started with the new challenges coming for climate change, privacy, social media, risk management and more. In every sense of the phrase, the 2010s have not even started yet.

Compliance Week will continue to delve into all of those issues as always. Already we have plans to address them at our 2010 annual conference (coming this May!), as well as by Webcast, podcast, online blogging and old-fashioned print reporting. Last year we also launched our executive roundtables to let you, the front-line fighters in compliance, gather in person and discuss the problems you face; that series has been hugely popular, and will continue in 2010 and beyond.

Despite all that, however, Compliance Week still needs your input and intelligence about what’s happening out there and what you need to know. Are we following the right issues? Is there other data or analysis you need? Always feel free to drop me a line at mkelly@complianceweek.com.

Good luck with the new year and the new decade. If the 2000s were any indicator, we’re all going to need it.