Just weeks after US Treasury Secretary Hank Paulson delivered his first big speech advocating unwinding parts of Sarbanes-Oxley, a new commission is formed to look at changing Sarbanes-Oxley.

And surprise, surprise, so now we have news of the Committee on Capital Markets Regulation. It's stacked with business leaders and academics who will consider, among other things, whether Section 404 of Sarbanes-Oxley should be changed.

It doesn't come across as an objective, bipartisan inquiry. Sounds like the answer's been drafted up. Why's that? Take a look at the committee.



For a start, it will be co-chaired by former Goldman Sachs president, John L Thornton. Quite handy when you are running a committee co-ordinating with Paulson, a former Goldman Sachs chief. They know each other well.

The committee is also top-heavy with chief executives from outfits like DuPont, Office Depot, CIT Group, Lehman Brothers, New York Stock Exchange and Deloitte Touche Tohmatsu, and others with close links to the Bush administration like former commerce secretary Donald Evans. Shareholder activists, corporate governance experts, former regulators and others who might take a different view to unwinding the legislation don't get much of a look in.

Paulson has flagged that changes to the law are necessary and as every politician knows, setting up a committee is a tried-and-true method of giving yourself enough cover while you go about getting the results you want.

Still, there are no guarantees here. As the Financial Times says, politicians are reluctant to change a law widely seen as clamping down on corporate wrongdoing, particularly when business is not that popular with voting public. As the FT suggests, a Democratic takeover of even one chamber of Congress might make it even more problematic.

And given that the committee will be examining liability issues which would have to include restricting class action litigation and state attorney-generals like Eliot Spitzer, you can expect it to generate serious heat.