Never underestimate the tone-deafness capacity of federal agencies, especially those that might have special reason not to be tone-deaf, because of recent widespread negative publicity.

By all accounts, it was an excellent evening. For the 75th anniversary of the Securities and Exchange Commission, the SEC’s Historical Society — an independent, nonprofit organization — threw a lavish dinner for 950 at the National Building Museum.

Critics, though, might gawk at the spectacle of a commission that’s been criticized as too close to industry celebrating itself in a dinner paid for largely by firms that have business before it.

Earlier this year, fraud investigator Harry Markopolos called the SEC “both a captive regulator and a failed regulator” for its failure to detect fraud by Bernard Madoff, who had been in the close orbit of the SEC before being unmasked as possibly the most corrupt money manager of all time.

But none of that, apparently, was on the minds of the industry attendees and SEC staffers who began their meal Thursday night with fennel-spiced prawns and five-citrus salad and heard tributes to current and past SEC chairmen and a speech by the current top regulator, Mary Schapiro.
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A giant screen projected images of SEC luminaries over the diners, who savored main course selections that included port wine and orange-glazed rock Cornish game hen. Each attendee was given a hardcover, elaborately produced book commemorating the occasion with photos from the commission’s history, including Joseph P. Kennedy giving a press conference in 1934 and the all-female 1939 SEC bowling league.

The dinner was financed by donors to the Historical Society who purchased tables ranging in price from $3,500 to $7,500 and placed notices in the bound book congratulating the commission on its achievements. (“Each new day presents an opportunity to celebrate,” read the ad from Fidelity Investments. “A blue ribbon achievement? It certainly is!” gushed a full-page ad by the accounting firm Ernst & Young.)
[...]
More than 70 tables were sold for the event, largely to law and lobbying firms that do business with the SEC. Among the table sponsors were Standard & Poor’s, the ratings agency that came under criticism for failing to scrutinize the subprime mortgage market before it collapsed…

When questioned, the SEC defended itself as follows:

The event was organized by the nonprofit SEC Historical Society, a 501(c)(3) organization which is not in any way affiliated with the SEC. The SEC staff who attended the event all paid their own way.

The SEC’s elastic definition of paying your own way might explain a lot about that agency’s troubled performance:

Tickets cost $250 per person but $50 for SEC staffers or government employees.

Too bad all those people who accepted free tickets to ballgames from Jack Abramoff didn’t think of simply paying him $5 a ticket. That would have got everyone off the hook pretty fast, right?